FHA Loans Arizona

If you are in search of a housing loan, you may want to look into FHA loans in Arizona. FHA loans have helped thousands of homeowners to find a new home and first-time buyers to find a great deal that helped them get into their first home.

Traditional lenders require a set of criterion that is difficult to meet even if you have a good income. But there are some alternatives that you may want to look into if you are looking to purchase a home in Arizona.


FHA Mortgage Loans Arizona

An FHA Mortgage loan is a mortgage for a home that is insured by the Federal Housing Administration (FHA). The FHA is a federal body that oversees the dispersion of funding for homeowners. If you borrow from the FHA, your money is insured, and you have more protection than you would if you purchased a home from a private agency.

FHA loans are a great way to get your first home while insuring your investment. It also allows you to have down payment assistance and flexible qualification criteria. It may be difficult to get help otherwise, so FHA steps in as a government aid to help people get the house they want when others turn them down.

What Are The FHA Loan Requirements?

The FHA loan requirements are not as stiff as other mortgage or lending associations. Banks, in general, have a strict list of criteria that you need to qualify for a housing loan. Often, this is determined by one’s credit and payment history, their debt-to-income ratio, and other factors that determine one’s credit score.

While there are some requirements for an FHA loan, as well, they tend not to be as stringent as those that are required by traditional lenders.


Arizona FHA Loan Credit Score Requirements

As mentioned above, FHA lenders are not as “picky” about your credit score. They know you are seeking help because you do have trouble meeting basic obligations or struggle with a lower credit score. That’s why they have lowered the level of income-to-debt ratio and credit that you have to have to get a loan.

With an FHA housing loan in Arizona, the only criteria for qualifying are listed below:

  • You must buy a home in Maricopa County or around or in the city of Phoenix
  • The loan must not exceed $300,000.
  • Have a minimum FICO score of 640
  • Your income must not exceed $88,340
  • Maximum debt-to-income ration of 45%
  • Take an online homebuyer’s education course

The types of homes that qualify are listed below:

  • Single-family homes
  • Two to four unit homes
  • Condos
  • Townhouses
  • Manufactured homes

Some people do not like having a restriction on the type of housing they can use with an FHA loan. But as long as you are purchasing a home in one of the accepted categories, you should be able to get the home you need while receiving help from a trusted federal housing agency.

FHA Loan Down Payment

There is always a loan down payment when you take out a loan or mortgage to purchase a home. To obtain an FHA loan, you need only make a down payment of around 3.5% if you have a credit score that is at least 580.

While the FHA loan process is easier to qualify for than traditional loans, there are some things you have to do to achieve this status. Having a higher credit score can guarantee that your down payment will be relatively low and you can more easily manage your payment plan.

FHA Loan Limits in Arizona (Updated For 2019)

Current FHA Loan limits in most counties in the state of Arizona is around $294,515 for a single family residence. The FHA loan limit is 65% of the conforming loan limit of $453,100. If you live in the Coconino County area, you may notice the limit is higher because it is allowing for a higher standard of living. Things generally cost more in Coconino County, so the housing industry reflects this. Flagstaff, Arizona features some of the highest-priced houses in the state which is located in Coconino County. Because of the difference in the economic status there, the average sales prices of a home in Coconino County is $278,000.

FHA Loan Types Available in Arizona

There are several different types of FHA housing loans you may get in Arizona. The most common types are described below. Notice that some common factors are present in all of them, but the specifics vary according to the amount of help you may need and the type of real estate you are looking to purchase or finance.

FHA 203k Construction Loan

FHA 203k loans allow you to borrow money for home purchase as well as home improvement. These types of mortgage loans allow you to use the money for improving your current home if you choose not to purchase a new home. But you may also use it for that as well. The FHA guarantees these loans, so there is less risk with this type of loan.

FHA Home Plus Program

If you decide on an FHA Home Plus loan, you can qualify for this type of loan in any Arizona counties except for Maricopa and Pima Counties. Many home buyers in Arizona opt in for the FHA Home Plus Program with down payment assistance. These loans are often easier to qualify for than conventional mortgages, and it is a more attractive deal for first-time homebuyers.

The down payment assistance for an FHA Home Plus loan is 4-5%. It is important to weigh your options and think about which investment is best for your circumstances. You need a minimum FICO of 660 to qualify for this type of loan. So if you don’t have that high of a credit rating, a 203k loan might be better for you.

Other limits of this type of loan include having a maximum purchase price of $371,936. The loan limits will also be determined by the FHA loan requirements and boundaries within your county. You also need a maximum income of $92,984 and a maximum debt ratio of 45%. This is a pretty good deal when you have a situation where you are struggling with your expenses and need help with a down payment or overall help obtaining a loan.

FHA Home in 5 Program

If you are looking for a house in Maricopa County but do not qualify for some of the other types of loans, the FHA Home in 5 Program might work for you. These loans can help you with the cost of a down payment as well as closing costs. This housing loan program has become quite popular in recent years due to its down payment options.

It is often the down payment that causes people the most problem when purchasing a home. They may qualify for the payments and have the money to make their mortgage, but they often do not have the money to make a down payment at the time they take out the loan. The FHA Home in 5 Program allows you to do this while offering payment assistance with the down payment.

Highlights of the Home in 5 Option:

  • Assistance for down payment or closing costs up to 5% of the balance.
  • Up to 6% available for qualified veterans and active duty military, as well as active reservists
  • Easy access to assistance funding

These things are very important to the first-time homebuyer. You’ll also have the assurance that the money will always be there when you need it, unlike some federal assistance programs that promise the money but don’t deliver when you need it.

How to Qualify:

  • Buy a house in Maricopa County or the city of Phoenix for up to $300,000.
  • Purchase a condo, townhouse, single-family home, or 2-4 unit home or manufactured home.
  • Have a minimum FICO score of 640.
  • Have a total income of no more than $88,340 to abide by the Arizona FHA regulations
  • A debt-income ratio of 45%.
  • Take an online homebuyer course

FHA Pima Tucson Homebuyer’s Program

The Pima Tucson Homebuyer Program is a supplemental program that can be used in conjunction with an Arizona FHA mortgage program. The benefits you can get with this type of loan are similar to the ones that are offered by the other FHA programs we mentioned. You can use this type of loan in conjunction with others. But you should ask your FHA expert to explain exactly how it will work.

Highlights of this program:

  • There is down payment assistance available at 3, 4, or 5%. Choose what’s best for you based on your own needs and income.
  • This is a grant, not a loan, so you are not required to pay it back.
  • There is continuous funding, so you don’t have to worry about whether the money will be there.

If you live in Pima Country or the City of Tucson, you may qualify for this type of housing assistance up to $271,050. This is the loan limit for home buying in Pima County for single family homes.

You must have a minimum FICO score of 640. If you try to take out a different amount, you may be required to have a higher FICO score.

Another stipulation is that the income from all borrowers cannot go above the amount of $82,600. You also need a minimum income/debt ration of 45%. This is standard in Arizona. Finally, just take a homebuyer’s course online to qualify.

FHA Loan Refinance

If you are looking instead to refinance your current home rather than purchasing a new one, you may want to look into the FHA Loan Refinance option. This program allows you to borrow 3.25% of the equity in your home and to refinance your current home so that your payments are more affordable. For someone who is in a bind regarding current mortgage payments, this may be a good option. If you are using this with the range of 5-19.99% of your loan amount, you may have to pay private insurance for your mortgage. But if your equity is around the 3.25-5%, an FHA loan is your best bet.

An FHA loan has many advantages. It allows you to have a way to get the funds you need to make your first home purchase or to refinance your current home so that you have more money left at the end of each month. That is important to anyone who is trying to balance their budget while committing to the purchase of a home.

Purchasing a home is one of the most important things you can do to secure your financial situation. A house has both internal and external value. You can enjoy it and live in it for years, then sell it when things are rough. The key is to get the financing, so it empowers you to own your own home.

Some of the biggest advantages in an FHA loan are listed below:

  • Less demanding credit requirements
  • Lower down payments
  • Increased closing cost allowance
  • Larger income-debt ratios
  • Mortgage insurance
  • Grants for qualifying applicants

Getting behind in your mortgage can be scary and puts you in jeopardy of getting behind in your finances. Obtaining an affordable and low-interest FHA loan allows you to buy or maintain your home with payment assistance when you need it most. FHA is a federal institution backed by the US government, and it is designed to help people who make an income that is somewhat lower than the average. So check your income to see if you qualify.

While getting an FHA loan is a great solution for those who are having trouble doing it the conventional way, there are also some reasons why you may want to consider it carefully before committing to this type of loan assistance plan.

  • Low down payment
  • Must pay mortgage insurance
  • Limited choices
  • Property limitations
  • Income documentation
  • Seller hesitation 

Let’s look at a few of these disadvantages one at a time. A lower down payment sounds excellent, right? Who doesn’t want to pay a lower down payment for a home? But this can be a red flag to the lender as well as any third parties involved in the real estate transaction. If you are only paying 3.5% on a home, it means that your credit is not high enough to do it the conventional way (which is closer to 9 or 10%). This means that people may not trust you to pay back the loan or make timely payments on your mortgage in the future. It also means that you, the borrower, will have more to pay back in the long-term since you are avoiding paying the high down payment at the beginning.

Additionally, you will need to pay ongoing mortgage insurance to protect the property since it will be a long time until the property is yours. This is insurance that protects the Federal Housing Authority from the risk of lending money out to people who struggle to meet their obligations.

Also, you have fewer options as an FHA borrower because there are limitations on the types of properties you can apply it to. As long as you are purchasing a single family home, condo, or townhouse, you’ll be okay, though.

You must document all of your income and prove that you have a full-time job that will help you pay the mortgage each month when it comes due. This gives the lender further assurance that you can meet your obligation because you will have regular income coming in.

Finally, having a lower interest loan with FHA may make the seller hesitate to deal with you if it is a third party sale from a homeowner. People have a general impression about FHA borrowers that leads some to think you would be a credit risk. So you may have to sell yourself to the seller and convince them you will be able to meet your obligation easily.

How To Apply For An FHA Mortgage Loan in Arizona

If you have decided to purchase your first home, refinance your current home, or just see what is available to you in the real estate market, congratulations! What a great way to start the new year. A home is a big purchase, so you need to think about which type of home buying assistance plan you need to get the most out of your financing plan.

FHA offers a wide variety of home loans and mortgage assistance plans in the state of Arizona. Look over the ones we described in this article, then click the button below to get started!

Arizona Mortgage Program Cities & Towns Served:
Apache Junction, Avondale, Benson, Bisbee, Buckeye, Bullhead City, Camp Verde, Carefree, Casa Grande, Cave Creek, Chandler, Chino Valley, Clarkdale, Clifton, Colorado City, Coolidge, Cottonwood, Dewey-Humboldt, Douglas, Duncan, Eagar, El Mirage, Eloy, Flagstaff, Florence, Fountain Hills, Fredonia, Gila Bend, Gilbert, Glendale, Globe, Goodyear, Guadalupe, Hayden, Holbrook, Huachuca City, Jerome, Kearny, Kingman, Lake Havasu City, Litchfield Park, Mammoth, Marana, Maricopa, Mesa, Miami, Nogales, Oro Valley, Page, Paradise Valley, Parker, Patagonia, Payson, Peoria, Phoenix, Pima, Pinetop-Lakeside, Prescott, Prescott Valley, Quartzsite, Queen Creek, Safford, Sahuarita, San Luis, Scottsdale, Sedona, Show Low, Sierra Vista, Snowflake, Somerton, South Tucson, Springerville, St. Johns, Star Valley, Superior, Surprise, Taylor, Tempe, Thatcher, Tolleson, Tombstone, Tucson, Tusayan, Wellton, Wickenburg, Willcox, Williams, Winkelman, Winslow, Youngtown, Yuma


Arizona Mortgage Program Counties Served:
Apache County, Cochise County, Coconino County, Gila County, Graham County, Greenlee County, La Paz County, Maricopa County, Mohave County, Navajo County, Pima County, Pinal County, Santa Cruz County, Yavapai County, Yuma County