We’re Not Rural! Anthem Loses the USDA Loan

farmerWell, it looks like the federal government has decided that Anthem real estate is not in the boondocks any more.  In its latest update to go into effect at the end of September, the United States Department of Agriculture has decided that Anthem really isn’t rural now that Phoenix has grown north into our back yard, and has removed most (if not all) homes here from eligibility for the USDA loan.

For those not familiar with the in’s and out’s of lending, the purpose of the USDA loan was to encourage home buying in rural areas by offering loans, either directly from or guaranteed by the USDA.  USDA loans require NO downpayment so they are a hit with first time home buyers that have relatively low incomes.

So now, the only zero-down loans in Anthem are those available to veterans via the VA loan.  The rest of us will have to come up with at least 3.5% for a downpayment on a home here (for an FHA loan).  But given the debacle we had in 2008-2010, it seems prudent for every home buyer to start with some equity when purchasing a home, along with a good buffer of cash for emergencies.

If you’re curious about which areas are still eligible, the USDA website has an address search capability and map, but for now, select the “future eligibility” links on the left side to see the eligible properties starting October 1, 2013.