Buying your first home can be an exciting, yet complicated process, especially if that home is in Arizona. Home prices in the state have increased by 26 percent over the past year, according to January 2022 data from real estate brokerage Redfin. For first-time buyers on a budget, that can feel like standing at the bottom of Camelback Mountain — without a guide to make it to the top. Fortunately, there are easy trails that can lead to owning a home in the sun-drenched 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.
- Arizona first-time homebuyer loan programs
- Arizona down payment assistance
- Home in Five Advantage Program
- Home in Five Advantage Program Additional Assistance for Special Groups
- Home in Five Advantage BOOST
- Tucson Pima County HOME Down Payment Assistance Program
- Other first-time homebuyer loan programs
- Get started
- First-time homebuyer programs in nearby states
- Learn more:
Arizona first-time homebuyer loan programs
The Arizona Industrial Development Authority (AzIDA)’s HOME+PLUS program offers a 30-year fixed-rate mortgage coupled with down payment assistance up to 5 percent. 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 owned a home before. The program has had a big impact on homeownership in the state: According to the Arizona Department of Housing, more than 32,000 buyers have taken advantage of it.
The HOME+PLUS down payment assistance is a no-payment second loan forgivable after three years, unless you sell the home or refinance the first mortgage before that time is up. The loan doesn’t require a separate application; when you work with an approved mortgage lender and apply for the compatible first mortgage, you’ll automatically be considered for assistance.
Here’s a rundown of the requirements you’ll need to satisfy:
- 640 minimum credit score; 680 if you’re buying a manufactured home
- Maximum 45 percent to 50 percent debt-to-income (DTI) ratio, depending on loan type
- Annual income under $112,785
- Must complete homebuyer education course
- Must be a single- or two-family home, condominium, townhome or manufactured home
- Must be in Arizona
- Must be a primary residence
Arizona down payment assistance
In addition to the HOME+PLUS down payment assistance option, there are other programs throughout the state to help you cover the 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 moderate-income families afford a home in Maricopa County. Since its inception, the program has helped more than 22,000 buyers in the Phoenix metro area secure a combined $170 million-plus in down payment assistance. Through the program, borrowers can obtain a 30-year fixed-rate conventional, FHA or VA loan and a three-year forgivable second loan to be used for a down payment and closing costs. No payments are required on the second loan unless you sell your home or refinance the first loan within the first three years.
- 640 minimum credit score
- Annual income under $112,785
- Maximum 50 percent DTI ratio
- Must complete a homebuyer education course
- Must move in within 60 days of closing
- Must be a single-family home, condominium or townhome
- Must be in Maricopa County
- Must be a primary residence
- No purchase price limits
Home in Five Advantage Program Additional Assistance for Special Groups
Through the Home in Five Advantage Program, an additional 1 percent in down payment and closing cost assistance is available for certain groups in Maricopa County, including:
- Qualified U.S. military personnel and veterans
- First responders
- Borrowers earning less than $39,500 per year and who do not have a cosigner
Home in Five Advantage BOOST
Ask your lender or real estate agent about Home in Five Advantage BOOST, which can help get you an additional 0.5 percent of down payment assistance 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 homebuyers purchasing in Tucson or Pima County and offers up to 10 percent of the purchase price, provided you can contribute at least $1,000 and your income doesn’t exceed a certain amount. You’ll also need to complete homebuyer counseling, not have more than $10,000 in cash assets and have the equivalent of one month’s mortgage payment in reserves at the bank. The maximum purchase price for an existing home is currently $198,000, and for new construction, $243,000.
Other first-time homebuyer loan programs
You might also be able to lower your tax bill via a mortgage credit certificate (MCC). In Arizona, the MCC allows you to take a federal tax credit of 25 percent of your mortgage interest up to $2,000 per year. You’ll need a minimum credit score of 640 and be within income and purchase price limits, which vary based on household size and buying location.
While you’re considering first-time homebuyer programs in Arizona, be sure to also explore national programs that could help get you to your goal of homeownership. Start with Bankrate’s guide to first-time homebuyer loans and programs.
Now that you know some options available to first-time homebuyers in Arizona, you’re ready to get started with your home purchase. The Arizona Industrial Development Authority provides a list of mortgage lenders who can help you throughout the process. Regardless of which program you choose, it’s important to shop around for mortgage offers. Interest rates are projected to increase this year, so if you find a rate that’s especially competitive, be sure to lock it in.
With additional reporting by David McMillin