A first time home buyer in Arizona may face lots of difficulties in the housing market. In just 12 months, the home sale price in this region went up by 24%. From hefty prices to competitive investors, getting a new home seems impossible for many. Fortunately, some programs offered by states can help them through the daunting tasks of purchasing a new home for the first time. If you’re an Arizona citizen who needs financial support as a qualified first-time home buyer, you can consider any of the programs below. In this post, Hanfincal will walk you through them one by one.
1. Top 7 Best First Time Home Buyer Programs in Arizona
1.1. 1st-Time Homebuyer Programs
Although it can be a frightening and at times daunting experience, buying your first home has numerous benefits. The 1st-Time Homebuyer Program was created to assist you in making the most of these advantages. They increase your home’s affordability, provide you with more finance alternatives, and much more!
Its team of housing experts will help you from start to finish if you’re looking for the best first time home buyer programs in Arizona.
1.2. HOME PLUS Down Payment Assistance Program – DPA
The Arizona Industrial Development Authority manages the Home+Plus DPA. It provides you with a 30-year fixed-rate mortgage and a second loan with no payments and 0% interest. These advantages can be applied to your closing costs, down payment, or both.
Of course, you must first meet the requirements to be a first-time home buyer in the USA. Then, based on your eligibility and the residence you intend to purchase, you might have a variety of mortgage options. They consist of a mortgage from Fannie Mae, Freddie Mac, the VA, USDA, or the FHA.
To begin receiving Home+Plus assistance, choose a participating lender that is knowledgeable about the program and can guide you through the whole process.
- This program provides a second mortgage that will be fully forgiven following three years of residence.
- It is statewide available and supports up to 5% of the home sale price.
What’s in it for you:
- The maximum annual income is $112,785.
- The allowed DTI ratio is 45% (or 50% in some circumstances).
- Every borrower must have a credit score of at least 640. (some loan types require 680).
- Not only first-time homebuyers are qualified.
- Mortgage insurance is required for the first mortgage as a Fannie Mae or Freddie Mac loan and a down payment of under 20%.
- You’re required to finish the homebuyer training course before the loan closes.
1.3. Pathway To Purchase Down Payment Assistance
This program is supported by the Arizona Department of Housing and the Arizona Home Foreclosure Prevention Funding Corporation. It also provides a 30-year fixed-rate mortgage with a forgivable second loan. However, it is only applicable for borrowers with a Freddie Mac HFA Advantage® mortgage from an approved lender.
- This program provides a second mortgage that will be fully forgiven following five years of residence.
- It is limited to the several towns and cities affected by foreclosures: Bull Head City, Glendale, Casa Grande, Green Valley, Phoenix, Kingman, Sahuarita, Rio Rico, Sierra Vista, Sahuarita, Sierra Vista, Vail, Tucson, and Yuma.
- It supports up to 10% of the home sale price (up to $2000).
What’s in it for you:
- The price of the purchase must be $371,936 or less.
- The applicant’s annual income cannot be more than 80% of the median income in the applicant’s prospective location.
- You can qualify even if this is not your first time buying.
- Not applicable to newly built homes
- The purchased property must serve as the primary residence.
- Financial assistance is constrained and only offered on a first-come, first-served basis.
- Completion of a homebuyer education course by at least one borrower.
1.4. Home in Five Advantage Program
Using this program, low- to moderate-income households in Maricopa County will be able to own a home. As we have researched, it is offered by the Phoenix IDA and the Maricopa County Industrial Development Authority (MCIDA). Thanks to this program, more than 22,000 purchasers in the Phoenix metro region were able to get a total of $170 million in upfront assistance.
With the Home in Five Advantage Program, a first time home buyer in Arizona can get an FHA or VA loan with a fixed interest rate for 30 years. Besides, the second loan (which will be utilized for the down payment and closing fees) is also forgiven for three years. Also, unless you sell your house or refinance your first loan during the first three years, no second loan payments are necessary.
- This program is only available in Maricopa County.
- It supports up to 5% of the home sale price.
- The second mortgage will be fully forgiven after a three-year residence.
What’s in it for you:
- Minimum credit score: 640.
- Maximum DTI ratio of 50%.
- Less than $112,785 in annual income.
- Move-in is required 60 days after closure.
- Must finish a course in homebuyer education.
- No maximum price for purchases.
- You must own a townhouse, condominium, or single-family home.
1.5. Tucson Pima County HOME Down Payment Assistance Program
This program is created and run by Community Investment Corporation. Down payment help is available to qualifying homebuyers in the counties of Tucson and Pima. Also, this program is based on family size and income so as to provide assistance.
- This program is available in Pima County and the city of Tucson.
- It assists up to 10% of the home sale price.
- It offers a second mortgage, yet the forgiveness is based on loan amount and duration.
What’s in it for you:
- You must put down a down payment of at least $1,000 in your own money.
- The maximum price for a home is $334,680 for newly built homes and $299,250 for existing homes.
- You cannot be a house owner while buying.
- You must use the house as your primary residence.
- A licensed house inspection is necessary. (Cost may be deducted from the buyer’s required $1,000 contribution)
- The equivalent of one month’s worth of mortgage payments must be held in reserve by you.
- The cash assets you own cannot exceed $10,000.
- You must demonstrate that your household can afford your mortgage payments (based on DTI).
- Borrowers are required to finish a course on house buying.
1.6. Federal National Mortgage Association (FannieMae)
First-time home buyers from anywhere in Arizona can participate in this program. It is one of Arizona’s standard Home Plus loan programs and has its origins in the Fannie Mae HomeReady program.
What’s in it for you:
- 3% to 5% in the way of options for down payment aid. (depending on your loan circumstances, you may decide which option is best for you)
- The required FICO score is 640.
- 50% maximum debt to income.
- If over 80% AMI, the maximum income is $122,100.
1.7. Arizona Federal Housing Administration (FHA) Loans
- VA & USDA Loan Programs: These are the two well-known government loan programs that provide 100% funding. The program’s financial aid is utilized to pay closing expenses because there is no down payment necessary. As a result, you may purchase a property for little or no cash. They are accessible across Arizona.
- FHA Loan Program: In Arizona, FHA loans with down payment assistance are common due to their adaptability and other advantages. Anywhere in Arizona, the Home Plus FHA financing option is available. It continues to have a lot of benefits that appeal to Arizona first-time homeowners.
Don’t know which program to go for? Get your consultant today with 1st-Time Homebuyer Program.
2. First-Time Homebuyer In Arizona Stats
While looking for the AZ first time home buyer programs, you may want to have a look at the stats below.
- Average home sale price in Arizona: $365,444.
- 20% down payment in Arizona: $73,090.
- The average credit score in Arizona: 710.
- Minimum down payment in Arizona (3%): $10,960.
- Maximum home buyer grant: Loan of up to 10% of the purchase price in Pima county.
The most recent average house sale price for the state is used to calculate down payment requirements. Additionally, a standard mortgage with a “minimum” credit score of 620 requires a 3% down payment.
You might not need any down payment at all if you qualify for a VA loan (sponsored by the Department of Veterans Affairs) or a USDA loan (guaranteed by the US Department of Agriculture).
In conclusion, as a first time home buyer in Arizona, you may face various challenges, especially during the seller’s market. However, your dream of owning a new home in the Western United States can become true if you qualify for one of those programs. If you’re confused about a bunch of requirements and have questions regarding which program is the best for you, have a consultant with 1st-Time Homebuyer Program. Its team of housing experts will put you on the right board and guide you through the entire process. Hanfincal hopes this blog has been helpful for you.