Staying close to Phoenix, but paying less for a home

For some low – to middle-income families, coming up with a down payment for a house just won’t happen.  In today’s economy, funds in one’s savings account are put towards household and other living expenses. Many others are living paycheck to paycheck with the inability to save a dime.

In other words, homeownership seems like an unattainable goal.

It’s no mystery or well-kept secret that living in a rural area has monetary benefits. Often, rent, mortgage and utilities are less. However, a common misconception of rural living is some secluded house or barn in the middle of the boonies. Although that might seem like an ideal living situation for a few, many people don’t want that type of isolation.

Did you know that “rural” just means an area with a population of 25,000 or less? Areas right outside of Phoenix—a 10 to 30 minute drive—qualify as rural and suburban areas. Even better news—the USDA guaranteed home loan funds home loans in those towns. Why is that good news?

Benefits of the USDA Home Loan for Low and Middle Income Families

The USDA Home Loan caters to persons who CAN afford monthly mortgage payments, but CANNOT come up with a down payment.  And that makes sense. A person might be able to pay $1300 a month on rent, but to save up and pay a whopping $20,000 on a new home can’t be done without help.

The USDA’s loan program features:

  • No Down payment Option
  • 102% Financing (2% is the guarantee fee)
  • No Cash Reserves Required
  • Low Monthly Bills
  • Incentives for Energy Efficient Housing
  • Use Borrowed or Gifted Funds
  • No Loan Limit
  • Low Interest Rates
  • Less Stringent Credit Requirements
  • 30-year Fixed Mortgage

With the USDA loan, owning a home is possible, and borrowers do not need to move to a barnyard, farm or some old rickety house in the woods (unless they want to, of course; that’s just fine).

USDA Loan Qualifying Standards and Eligibility

Applicants must:

  1. Have an annual income within 60% to 115% of the median income of the area.
  2. Have a Principal, Interest, Taxes and Insurance (PITI) ratio of or below 29% and a gross income of or below 41%.
  3. Have a good credit history and a score of 620 or higher.
  4. Be interested in a home within a USDA defined “rural” area.
  5. Read the 1980-D instructions.

As long as an applicant meets the above requirements, she (or he) is well on her way to owning a new home right outside of Phoenix.

Jasmine Reese is a USDA LOAN subject writer for, a USDA-approved lender. She also studies animal science and Agriculture at the University of Missouri.

About The Amy Jones Group

Mindy Jones Nevarez is the owner of Amy Jones Group Keller Williams Integrity First. The Amy Jones Real Estate Group has been recognized as the #1 Real Estate Team in Chandler by the Phoenix Business Journal and voted Best of Our Valley for 4 years.

The Amy Jones Group specializes in real estate in Chandler, Sun Lakes, Gilbert, Mesa, Tempe, Ahwatukee, and Phoenix.