Arizona FHA Loans –  Requirements and Loan Limits for 2024 – Arizona FHA Lenders

arizona fha lenders

An FHA loan is a government-backed mortgage insured by the Federal Housing Administration, designed to help Arizona homebuyers with flexible qualification requirements and low down payment options.

FHA loans provide an accessible opportunity for potential homebuyers who might not meet standard qualifications for conventional mortgages. These loans, supported by the Federal Housing Association, appeal due to competitive interest rates, lesser down payment terms and lenient credit score requisites.

We will take you through the Arizona FHA loan requirements, detail what is needed to qualify, then help you to get pre-qualified. If you already know that an FHA loan is right for you, then click to connect with an Arizona FHA lender whether you live in Phoenix, Flagstaff, Tucson, or anywhere else.

To qualify for an FHA loan in Arizona, you typically need a minimum credit score of 580, a down payment as low as 3.5%, and a steady employment history. Additionally, meeting the debt-to-income ratio requirements is crucial, and having a property appraisal meeting FHA guidelines is also part of the qualification process.

Arizona Department of Financial Institutions, Mortgage Banker License #0951233, #0125011

FHA Loan Benefits

Arizona FHA loan benefits include low down payment options, flexible credit requirements, and competitive interest rates, making homeownership more accessible for first-time buyers and those with lower credit scores.

These are the benefits of an FHA loan versus a conventional loan:

  • Lower credit scores permitted
  • Lower down payment requirement
  • FHA interest rates are lower than conventional rates
  • Gift funds allowed
  • Seller closing cost contributions are allowed
  • FHA loans are assumable
  • Co-signers allowed
  • Higher debt to income ratios permitted

Types of FHA Loans in Arizona

There are various types of FHA loans available in the state of Arizona for both purchases and also refinances. Each of these are for a specific situation that a home buyer or current homeowner may encounter. Although these programs are available, not every lender offers them and the ones who do may have their own unique requirements.

  • Standard Purchase
  • Standard Refinance
  • FHA 203k Rehab (when buying or refinancing)
  • FHA Streamline Refinance
  • FHA One Time Close Construction Loan
  • FHA Cash Out Refinance
  • FHA Energy Efficient Mortgage

We will review some of these programs below and will provide additional information.

FHA Loan Requirements in Arizona for 2024

Arizona FHA loan requirements include a minimum credit score of 500, a down payment as low as 3.5% for scores above 580, steady employment history, and a maximum debt-to-income ratio of up to 56.9%.

These are the basic FHA loan requirements for this year. All of these must be met to be approved for an FHA loan. If you are not positive on whether you meet these standards or have questions, contact us so we can help.

  • Down payment of 3.5% or 10% if your credit score is below 580
  • 2-year employment history with some exceptions allowed
  • Fully document your income for the past two years
  • Minimum FICO score requirement of 500 – down payment will vary
  • Mortgage Insurance Premium (MIP) is required for every FHA loan
  • Maximum debt to income ratio of 43% with exceptions up to 56%
  • The home must be your primary residence
  • No bankruptcies or foreclosures in the past two years

FHA Down Payment Requirements

The down payment requirements for an FHA loan is the same in every state. The minimum requirement for an FHA loan is 3.5% of the purchase price. However, if your credit score is below 580, then the down payment requirement will be 10%.

If you do not have the down payment needed, you can also use gift funds from a relative.

Arizona FHA Down Payment Assistance

In addition to the inherent advantages of FHA loans, Arizona offers specific down payment assistance programs tailored to FHA loan applicants.

There are various down payment assistance programs in every state. Below is a list of just a few down payment assistance programs that may be available to you in Arizona. Home buyers will need to contact, and arrange for these programs independently. Lenders will accept the funds from these programs for your down payment but they will not arrange for the down payment assistance.

The assistance programs are designed to offer additional support to homebuyers who are considering an FHA loan but face challenges related to saving for a down payment and closing costs. By providing grants or low-interest loans, these initiatives help alleviate the upfront financial burden associated with buying a home, ultimately making homeownership more accessible and achievable.

Through these programs, eligible homebuyers in Arizona can receive financial assistance that helps bridge the gap between what they have saved and what is required as a down payment for an FHA loan, empowering individuals and families to take the step towards owning a home, especially when faced with high housing costs and other financial responsibilities.

Emphasizing these advantages and down payment assistance programs makes it clear that FHA loans in Arizona serve as a valuable resource for those seeking affordable paths to homeownership; they cater to a wide range of prospective homebuyers, promoting inclusivity and accessibility within the Arizona real estate market.

HOME Down Payment Assistance Program

HOME Plus Program

Pathway to Purchase Down Payment Assistance

In addition to the programs listed above, we have the ability to provide you with down payment assistance from the lender as part of the complete loan package. This option may work out better for you because it is a one stop shop for the down payment and the mortgage. Contact us here if you would like to discuss in greater detail.

Arizona FHA Lenders

There are many lenders in Arizona for you to consider. However, you should note that each lender is different and it is possible that most lenders do not offer all of the various FHA loan options. When most home buyers think about shopping for an FHA loan, they typically think about rates and fees which of course are extremely important. However, there are many other things to consider.

These are just a few examples of what a lender should offer:

  • Accept credit scores as low as 500
  • Approve individuals who are in the midst of a chapter 13 bankruptcy
  • Offer the FHA 203k rehabilitation loan
  • Offer the FHA one time close construction loan
  • Offer down payment assistance as part of their loan package
  • Help provide guidance on how to bump credit scores
  • Have the ability to use the maximum FHA debt to income ratio of 56.9%

In addition, a good lender or loan officer will be skilled and experienced in dealing with difficult financial and credit situations to find a way to get your loan approved. These are some of the things that separate us from other lenders in Arizona. 

Let us help you to get pre approved by completing this FHA loan scenario form with some basic loan scenario information. No credit report will be pulled by completing this form. 

Arizona FHA Loan Limits

Every county in the United States has specific maximum loan limits that are set for single family homes, as well as 2-4 unit properties. The limits are set based upon the average home sales value in that county. The base FHA loan limit for single family residences in Arizona for most counties is $498,257. Use this FHA loan limit lookup tool to see what the FHA loan limits are in your county.

County Name Single Family 2 Units 3 Units 4 Units
APACHE $498,257 $637,950 $771,125 $958,350
COCHISE $498,257 $637,950 $771,125 $958,350
COCONINO $525,550 $672,800 $813,250 $1,010,700
GILA $498,257 $637,950 $771,125 $958,350
GRAHAM $498,257 $637,950 $771,125 $958,350
GREENLEE $498,257 $637,950 $771,125 $958,350
LA PAZ $498,257 $637,950 $771,125 $958,350
MARICOPA $530,150 $678,700 $820,350 $1,019,550
MOHAVE $498,257 $637,950 $771,125 $958,350
NAVAJO $498,257 $637,950 $771,125 $958,350
PIMA $498,257 $637,950 $771,125 $958,350
PINAL $530,150 $678,700 $820,350 $1,019,550
SANTA CRUZ $498,257 $637,950 $771,125 $958,350
YAVAPAI $498,257 $637,950 $771,125 $958,350
YUMA $498,257 $637,950 $771,125 $958,350

Maricopa County has the highest FHA loan limits in Arizona. Read more about the loan limits in Maricopa County.

FHA 203k Loans in Arizona

FHA 203k loans are a great program which will allow you to borrow the money needed to purchase the home plus additional funds needed to rehabilitate or remodel the home. This program is also available in your state and we work with lenders that help with your FHA 203k loan.

If you would like to fully understand how this program works, we suggest reading our article on FHA 203k loans.

FHA Streamline Refinance in Arizona

The FHA streamline refinance program is available to existing homeowners who would like to refinance for a lower rate while eliminating some of the refinance costs such as an appraisal. You may also get a discount on the mortgage insurance premium which is another advantage.

For more information, please read our article on the FHA streamline refinance.

Arizona FHA Loan Pre-Approval Process

If you are looking for an FHA loan, there is an optimal process you should follow to get pre-approved.

  1. The first step is to make sure you have the minimum down payment needed to qualify
  2. check your credit and try to cleanup anything that is pulling down your scores
  3. Get a copy of your tax returns for the past two years
  4. Get copies of your pay stubs for the past month
  5. Get copies of your last two months’ bank statements
  6. Speak to an FHA lender about your loan scenario

Speak to a lender early in the process because they can identify opportunities to help with your FHA approval. This should be done months before you start looking for a home. Read more about how to get pre-approved for an FHA loan.

What to Look for in an FHA Lender

We take a few things into consideration when looking at which lenders we work with. Some of these also may be, or should be very important to you as you continue shopping for an FHA loan.

A good FHA lender will:

  • Allow for credit scores as low as 500
  • Provide FHA 203k loans
  • Offer competitive rates and fees
  • Have a great processing and underwriting team
  • Work closely with you throughout the loan process
  • Communicate well and will provide you with updates along the way

Arizona FHA Loan Calculator

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Frequently Asked FHA Questions

Can I get an FHA loan with a bankruptcy?
In general, you will need to wait two years before applying for an FHA loan after a bankruptcy. However, there are some exceptions which may allow you to apply sooner. Read our article on the bankruptcy waiting period.

Are all FHA lenders the same?
Not all lenders who offer FHA loans are the same. They all do not offer all of the FHA programs and their rates and fees may also vary. Most importantly, the individuals who help to process and underwrite your loan will have a huge impact on your FHA loan experience.

Can I use gift funds for an FHA loan?
FHA loans do allow for gift funds to cover your down payment as well as your closing costs. The gift funds must come from a relative or a close friend as approved by the lender. You will need to provide the lender with a gift letter that is signed by the donor.

Do I need an appraisal for an FHA loan?
The FHA does require an appraisal and inspection before your loan can be approved. The FHA inspection has clear guidelines on what needs to be repaired before your loan can close. They want to make sure home buyers are moving into a home that is safe and operational.

Can I get an FHA loan for an investment property?
FHA loans are for primary residences only and if your goal is to purchase an investment property, you cannot use FHA insured financing for that purchase. However, if you are currently living in a home that is financed with an FHA loan, you can move to a new home and keep the current home as an investment.

What is the minimum credit score requirement for an Arizona FHA loan?
The minimum credit score requirement for an Arizona FHA loan is typically 580. However, some lenders may accept scores as low as 500 with a larger down payment. It is important to note that individual lenders may have their own credit score requirements, so it is advised to shop around for the best options. Additionally, maintaining a good credit score can help borrowers secure more favorable loan terms and interest rates.

How much can I borrow with an Arizona FHA loan?
The amount you can borrow with an Arizona FHA loan depends on various factors, such as your income, credit score, and the purchase price of the home. However, maximum loan limits for FHA loans in each county in Arizona. This limit may be higher in high-cost areas. It’s important to consult with a mortgage lender to determine your specific borrowing capacity based on your individual circumstances. Use our FHA loan limits lookup tool to see what the limits are in your area.

Can I use an Arizona FHA loan to purchase a second home or investment property?
No, an Arizona FHA loan cannot be used to purchase a second home or investment property. FHA loans are intended for primary residences only. According to the Federal Housing Administration (FHA), borrowers must certify that they will occupy the property as their primary residence within 60 days of closing the loan. Therefore, if you are looking to purchase a second home or investment property, you would need to consider alternative financing options.

What are the income limits for qualifying for an Arizona FHA loan?
The income limits for qualifying for an Arizona FHA loan depend on the county and household size. In general, the maximum income limit for a single-person household is $53,100, while for a household of four people it is $76,500. These income limits are set by the U.S. Department of Housing and Urban Development (HUD) and are adjusted annually based on the area’s median income. It’s important to note that these limits may vary, so potential homebuyers should consult with a mortgage lender or HUD-approved housing counseling

Arizona Home Buying Statistics

If you are thinking about buying a home in Arizona, these home buying statistics may be interesting and relevant to you.

Population = 7,359,000
Number of Housing Units = 3,186,000
Percent of Housing Units that are Owner Occupied = 65.8%
Average Home Value = $295,600
Average Mortgage Payment = $1,745
Average commute time to work = 25.7 minutes

Top Arizona Cities by Population
Phoenix – 1,644,409
Tucson – 546,574
Mesa – 512,498
Chandler – 280,711
Gilbert– 275,346
Glendale – 252,136
Scottsdale – 243,050

*References (US Census – Arizona Demographics)

Arizona Department of Financial Institutions, Mortgage Banker License #0951233, #0125011

Arizona FHA Loans