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Arizona First-Time Home Buyer Programs of 2018

Finding the Right Mortgage, Mortgages
Arizona First-Time Home Buyer Programs of 2018
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Arizona boasts stunning views and generally mild winters, making it a place many people want to call home. To help make that happen, the Grand Canyon State has a program to assist first-time home buyers, especially those who have weaker credit or who have struggled to save for a down payment.

The Arizona Industrial Development Authority, or AzIDA, has a mortgage program specifically designed to help people become homeowners. Over 90% of participants in the Home Plus program are first-time home buyers, though owning real estate now or in the past doesn’t necessarily disqualify you, said Dirk Swift, the program administrator, in an email.

AzIDA highlights and eligibility requirements

Highlights

  • Down payment and closing cost assistance
  • Reduced mortgage insurance premiums

Eligibility

  • Property must be located in Arizona and not exceed purchase price limit
  • Borrower must occupy the home as a primary residence
  • Borrower must meet income and credit score requirements
  • Home buyer education course required
  • Some mortgage types not available in certain counties

» MORE: 25 tips for first-time home buyers

Arizona’s Home Plus loan program

This program combines 30-year, fixed-rate mortgages with financial assistance for your down payment or closing costs. Qualified applicants can receive up to 5% of the loan’s principal balance — depending on the mortgage type — in the form of a deferred, no-interest second mortgage. You don’t need to repay this second mortgage unless you sell or refinance the home within the first three years of ownership. Only borrowers using the Home Plus program can take advantage of down payment assistance.

Getting a 30-year, fixed-rate loan with less than 20% down typically requires monthly mortgage insurance, but with the Home Plus program, your premiums may be lower than usual. AzIDA works with the government-sponsored enterprises Fannie Mae and Freddie Mac to offer mortgage insurance at a cost that’s considerably lower than what you’ll see outside the Home Plus program.

Your next step

Now that you’re familiar with the basics of what an Arizona Home Plus loan is and how it works, it’s time to take the next step.

For full details and eligibility requirements of this loan program, visit the Arizona Department of Housing website.

If you think a Home Plus mortgage may be right for you, then it’s time to select a lender. AzIDA, which doesn’t review applications or lend money, relies on a network of participating lenders throughout the state. These lenders may have additional rules about income limits, credit scores and the types of property that are eligible for a Home Plus mortgage, so the only way to know for sure whether you qualify is to contact them.

» MORE: See the best Arizona mortgage lenders

National first-time home buyer programs to consider

Conventional mortgages enabled by Fannie and Freddie are popular among first-time home buyers. You can get a mortgage with as little as 3% down.

FHA-backed loans (via the Federal Housing Administration) are especially helpful for first-time home buyers with credit scores that don’t meet the minimums of a conventional mortgage.

VA loans are often the best choice if you’re a veteran or currently serving in the military. Veterans Affairs loans typically offer low interest rates and 0% down payment options.

USDA loans are available to anyone who’s interested in living in a rural area. These loans, backed by the U.S. Department of Agriculture, typically have low income and credit score requirements, and can be obtained with 0% down.

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