First-Time Home Buyer Assistance Programs in Arizona

Buying your first home can be an exciting, yet complicated process, especially if that home is in Arizona. Home prices in the state have risen 26% over the past year, according to January 2022 data from real estate brokerage Redfin. For first-time buyers on a budget, it can feel like standing at the base of Camelback Mountain—without a guide to get to the top. Luckily, there are some easy trails that can lead to owning a home in the sunny desert. Whether you’re looking in Phoenix, Flagstaff, Sedona, or somewhere in between, consider these first-time homebuyer assistance programs to help you navigate the process.

First-Time Home Buyer Loan Programs in Arizona

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Arizona Industrial Development Authority’s (AzIDA) HOME+PLUS program offers a 30-year fixed rate mortgage with up to 5% down payment assistance. The first mortgage can be a conventional, FHA, VA, or USDA loan, and can come with reduced mortgage insurance to help keep your monthly payments low. HOME+PLUS is available to both first-time homebuyers and those who have already owned a home. The program has had a significant impact on homeownership in the state: according to the Arizona Department of Housing, more than 32,000 buyers have taken advantage of it.

HOME+PLUS Down Payment Assistance is a second loan with no payments repayable after three years, unless you sell the home or refinance the first mortgage before the end of that period. The loan does not require a separate application; When you work with an Approved Mortgage Lender and apply for the first compatible mortgage, your request for assistance will automatically be considered.

Here is an overview of the requirements you will need to meet:

  • 640 minimum credit score; 680 if you buy a prefabricated house
  • Maximum debt-to-income ratio (DTI) of 45-50%, depending on loan type
  • Annual income below $112,785
  • Must complete homebuyer training course

Property Requirements:

  • Must be a single or two family home, condominium, townhouse or manufactured home
  • Must be in Arizona
  • Must be a primary residence

Down payment assistance in Arizona

In addition to the HOME+PLUS down payment assistance option, there are other programs statewide to help with down payment and closing costs.

Home in Five Advantage program

The Maricopa County Industrial Development Authority (MCIDA) and Phoenix IDA offer the Home in Five Advantage program to help low-to-middle income families afford a home in Maricopa County. Since its inception, the program has helped more than 22,000 Greater Phoenix area buyers obtain combined down payment assistance of over $170 million. Through the program, borrowers can obtain a 30-year fixed-rate conventional, FHA, or VA loan and a second three-year repayable loan to be used for a down payment and closing costs. No payment is required on the second loan unless you sell your home or refinance the first loan within the first three years.

Borrower Requirements:

  • 640 minimum credit score
  • Annual income below $112,785
  • 50% maximum DTI ratio
  • Must take a home buying training course
  • Must move in within 60 days of closing

Property Requirements:

  • Must be a single family home, condominium or townhouse
  • Must be in Maricopa County
  • Must be a primary residence
  • No purchase price limit

Home in Five Advantage Program Additional Assistance for Special Groups

Through the Home in Five Advantage program, an additional 1% down payment and closing cost assistance is available for select groups in Maricopa County, including:

  • Qualified U.S. military personnel and veterans
  • First Responders
  • Teachers
  • Borrowers earning less than $39,500 per year and not having a co-signer

Home in Five Advantage BOOST

Ask your lender or realtor about Home in Five Advantage BOOST, which can help you get an additional 0.5% down payment if you’re buying in a designated low-income neighborhood.

Tucson Pima County HOME Down Payment Assistance Program

This local down payment assistance program is for first-time home buyers in Tucson or Pima County and offers up to 10% of the purchase price, provided you can contribute at least $1,000 $ and your income does not exceed a certain amount. You’ll also need to follow home buying tips, have no more than $10,000 in cash, and have a month’s worth of mortgage payment in reserve in the bank. The maximum purchase price for an existing home is currently $198,000 and for a new build is $243,000.

Other First-Time Home Buyer Loan Programs

You may also be able to reduce your tax bill through a Mortgage Credit Certificate (MCC). In Arizona, the MCC allows you to receive a federal tax credit of 25% of your mortgage interest up to $2,000 per year. You’ll need a minimum credit score of 640 and meet income and purchase price limits, which vary by household size and location of purchase.

As you consider homeownership programs in Arizona, be sure to also explore national programs that could help you achieve your homeownership goal. Start with Bankrate’s guide to loans and programs for first-time home buyers.

To start

Now that you know some of the options available to first-time home buyers in Arizona, you’re ready to start buying your home. The Arizona Industrial Development Authority provides a list of mortgage lenders who can help you through the process. Whichever program you choose, it’s important to shop around for mortgage deals. Interest rates are expected to rise this year, so if you find a particularly competitive rate, be sure to lock it in.

With additional reporting by David McMillin

Homeownership Programs in Neighboring States

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