Arizona First Time Homebuyer Programs

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Updated on Tuesday, March 26, 2019

Coming up with money for a down payment or closing costs can be a big obstacle to buying a home. If you’re looking to buy a home in Arizona, though, there are two down payment assistance programs that are packaged with 30-year fixed-rate mortgages. You don’t have to be a first-time homebuyer to participate in either program, but they’re both useful for potential homeowners looking to buy in the Grand Canyon state.

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The popular Home Plus Home Loan Program offers up to 5% down payment help. The Pathway to Purchase Down Payment Assistance program, meanwhile, is targeted at homes in very specific areas in 12 cities and offers up to 10% assistance.

Here’s a look at the Arizona programs that can make purchasing a home a reality for first-time homebuyers.

Arizona first-time homebuyer programs

The Arizona Industrial Development Authority, or AZIDA, offers the Home Plus program through the Arizona Department of Housing (ADOH). The ADOH partners with several for-profit and nonprofit organizations to offer housing-related assistance, including consumer protection, affordable housing advocacy and eviction and foreclosure help.

The ADOH is also home to the Arizona Home Foreclosure Prevention Funding Corporation, which is its partner on offering the Pathway to Purchase program.

Requirements for Arizona assistance

For the Home Plus and Path to Purchase programs, you must make the home you’re buying your permanent residence within 60 days after closing. Each borrower must also take a homebuyer education class.

Home Plus Home Loan Program

The Home Plus Home Loan Program combines a 30-year fixed mortgage with the ability to receive up to 5% of the loan’s principal balance as a deferred, no-interest second mortgage.The second mortgage only has to be repaid if you sell the home or refinance or pay off the first mortgage before the end of three years.

What is it?

The program offers

  • Down payment assistance that can also be used for closing costs or a combination of the two.
  • Reduced mortgage insurance on Fannie Mae and Freddie Mac conventional loans.
  • Additional 1% down payment help for military borrowers who are not eligible for a VA loan

Requirements

To qualify for the program, you must

  • Have a minimum credit score of 640. Some loans or terms will require a score of 660 or 680
  • Not exceed income limit of $99,170 a year.
  • Buy a home with a purchase price that doesn’t exceed $396,680.
  • Have a maximum debt-to-income ratio (DTI) of 45% or 50%, depending on the type of loan.
  • Buy a property that is either a single-family home, a duplex (one unit must be occupied by the borrower), a condominium, or a Fannie Mae-eligible and approved Planned Unit Development.
  • Purchase mortgage insurance if your down payment is less than 20%.

How to apply

If you’re interested in the Home Plus loan program, your first step is getting in touch with an approved, participating lender. Your lender will determine if you qualify for the program and sign you up for the program.

It’s a good idea to seek out a loan officer who is knowledgeable in down payment assistance programs, in particular the Home Plus program. Each lender may have different requirements, so you might want to get several offers for comparison.

Pathway to Purchase Down Payment Assistance Program

This program is a partnership between the Arizona Department of Housing and the Arizona Home Foreclosure Prevention Funding Corporation to provide down payment help to people buying homes in 26 targeted ZIP codes in 12 Arizona cities. The areas are those that were hardest hit by foreclosures.

What is it?

The program offers

  • A 30-year fixed-rate mortgage with down payment assistance in the form of a second mortgage worth up to 10% of the purchase price, or a maximum of $20,000, whichever is less.
  • The down payment assistance loan is a five-year forgivable loan with a 0% interest rate and no required monthly payments.
  • The assistance can be used for a down payment, closing costs or a combination of the two.

Requirements

To qualify for the program, you must

  • Buy a home in one of 26 designated ZIP codes in 12 cities: Sierra Vista, Glendale, Phoenix, Bullhead City, Kingman, Green Valley, Sahuarita, Tucson, Vail, Casa Grande, Rio Rico or Yuma.
  • Qualify for a Freddie Mac HFA Advantage mortgage
  • Have a minimum credit score of 640.
  • Have a maximum DTI of 45%
  • Have an income that doesn’t exceed $92,984
  • Buy a home with a purchase price of no more than $371,936
  • Buy an existing single-family home, condominium or townhome.

How to apply

Your first step should be to get in touch with an approved, participating lender to find out if you qualify for the Pathway to Purchase program. If you do, the lender will help you apply.

Ask for a loan officer who knows about the Pathway to Purchase program. Each lender may have different requirements, so reach out to several to compare offers.

National assistance

Arizona offers two good options for new or existing homeowners who need help with money for a down payment or closing costs. Even better is that both secondary loans are deferred, no-payment loans that are completely forgiven over a set period.

However, you’re not limited solely to programs in Arizona. There are several country-wide programs that offer help for new homebuyers. To learn more, check out LendingTree’s guide to national first-time homebuyer programs.

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