Living In Tucson Blog

I was in Miami recently visiting relatives and read an article in the Miami Herald about creative ways to buy a home. They recommended a FHA loan as the best way to buy. It is a great loan program for buyers with a minimal down payment of only 3.5%. The source of funds can even be a gift. With a 620 minimum credit score and maximum loan amount of $316,250 in Pima County, Arizona, a FHA loan is the right choice for the majority of home buyers. FHA did make recent changes pertaining to underwriting guidelines including, the minimum credit scores and mortgage insurance premiums.

Another suggestion is a private loan. Now that institutional loans have such strict underwriting guidelines, private lenders typically can make up the rules to match your needs.  In most cases, you can expect higher interest rates, higher closing costs and greater down payments. Most mortgage brokers have private investors willing to make these deals happen. Another funding resource could be a family member. Hopefully, you have a rich uncle!

Another creative approach is a seller carry back. Some institutional lenders allow a second position mortgage behind a new first mortgage a borrower obtains to buy a home. For example, the seller owns their house free and clear or they have ample equity in their house. The buyer obtains a loan for 80% of the sales price and the seller is the second position lender with a 10% loan for a combined loan-to-value ratio of 90%. Or, the seller can also be a private lender by accepting a down payment and financing the difference. If the buyer defaults, the seller keeps the down payment and gets the house back to sell it again!

The two zero down options still being offered are VA loans for active military or vets and USDA loans for rural housing. You might be surprised to learn that rural area near Tucson includes Vail, Marana and Sahuarita.  USDA loans require borrowers to have an income no higher than 115% of the median income in the area. In Pima County, you can earn up to $73,000 for the household to qualify.

This seems to be a great time to get back in the housing market thanks to the lowest rates since the Eisenhower administration and affordable housing prices. I’m David Wolsky and I can be reached for advice at 520-275-2536. I am fully licensed in Arizona at PHH Home Loans (also known as Coldwell Banker Home Loans). Email me at david@davidwolsky.com.

The $8000 tax credit expires on November 30th. I would urge anyone interested in obtaining the credit to close their deal by November 15th to avoid running into the Thanksgiving holiday when title companies and the county recorder’s offices are closed typically for the weekend. I would also urge any first time buyers to stay away from short sales, because they will be difficult to close before the deadline. The current program has helped over 1.4 million people already! The credit is available to first time home-buyers or anyone who has not owned a home for at least three years. Click on www.irs.gov to answer any questions you may have regarding eligibility and to download the correct form to receive your refund. There is growing support to continue the program for at least six months, but there has been no new legislation as of this writing. There has also been some talk of expanding the tax credit to $15,000 and opening it up to all home buyers.

If you or someone you know would like to explore the possibilities, call me, David Wolsky at 520-275-2536. I can pre-approve you on the same day! You can choose between FHA,VA and conventional financing. There is also a program in Arizona to help buyers by foreclosed properties. It’s called, Your Way Home Arizona. My company, PHH Home Loans and Coldwell Banker Home Loans also offers financing for USDA Rural Housing which is a zero down program designed to help buyers in more rural settings.