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USDA Home Loans: Making Homeownership Affordable in Rural Areas

Written by Arizona Financial Staff | Jan 10, 2025 9:21:46 PM

 If you’re thinking about buying a home in a quieter, rural area outside the big cities in Arizona, you may be able to buy a home with no money down with the USDA home loan programs.  

With the U.S. Department of Agriculture (USDA) home loan program, eligible buyers can save on interest rates and closing costs with USDA loan benefits like 100% financing, low interest rates and no down payment – making the dream of homeownership more affordable. 

The USDA loans, offered by approved lenders like Arizona Financial Credit Union, provide 100% financing home loans to eligible lower- to moderate-income families to buy a home in rural or suburban areas, with no down payment required.  

While USDA home loan programs are often thought of as being for the purchase of farms, USDA loans can be used for homes and various property types like condos and townhomes, as long are they are located in an eligible rural or suburban area. 

USDA loan eligibility 

USDA loans are available for eligible rural homeowners who meet eligibility requirements, including the property location, income limits (which vary based on the location) and household size.

For USDA loans, the property must be located in a USDA-approved area in rural or suburban areas. 

USDA loan benefits 

  • No down payment is required. USDA loans allow you to finance up to 100% of the home’s value. 
  • Low, fixed interest rates for low-income borrowers. 
  • Flexible credit requirements, and more lenient credit score requirements. 
  • Down payment assistance programs for closing costs. 
  • No mortgage insurance – however, there’s an upfront guarantee fee and an annual fee. 

 

USDA loan fees 

Although homebuyers can get up to 100% financing with a USDA loan, they will still need to cover regular mortgage costs like the loan origination fee and title insurance.  

And while a USDA loan does not require mortgage insurance like an FHA loan, there are two upfront fees with a USDA loan: a guarantee fee and an annual fee that may be financed into the loan.  

Closing cost assistance 

While there is no down payment required for a USDA loan, there may be out of pocket costs such as closing costs for the loan as well as any fees, interest, taxes and insurance.

The good news is that there are USDA down payment assistance programs that offer grant money to cover the majority of these costs – you may be able to buy your home with as little out of pocket costs as possible. 

Ready to get started? 

Arizona Financial offers several home mortgage options and refinancing, including government home loan programs like USDA, FHA and VA loans. 

If you’re interested in a USDA loan, Arizona Financial’s team of home loan specialists are ready to help you determine if you qualify based on property and income eligibility. 

From traditional home mortgages to construction and lot loans, Arizona Financial offers a variety of home loan solutions for your needs.