Home ownership is a critical part of the American Dream. But one of the biggest challenges to finally becoming a homeowner is making the requisite mortgage down payment. Luckily, there are various programs available to help certain demographics with their mortgage down payments, to varying degrees. Read on to see if there might be a down payment assistance program in Arizona that is right for you!
Mortgage Down Payment Overview
The mortgage down payment is the amount of money you will be paying upfront for a house. Most mortgage lenders require a down payment of at least 3 percent of the home’s total sale price. Loans insured by the Federal Housing Administration (FHA) require a down payment of at least 3.5 percent. Furthermore, the amount required for your down payment may increase even more depending on your credit history, the type of house you are buying and other factors. Also keep in mind that if you purchase a home and make a down payment of less than 20 percent, you will be required to pay for private mortgage insurance (PMI) along with your regular mortgage. Therefore, it is easy to see how quickly a down payment can impact your monthly expenses once you become a homeowner. Down payments can be challenging, but that is precisely why governments provide down payment assistance programs to encourage home ownership in certain areas or among certain groups of people.
Are you a veteran? Click here for info on VA Home Loan programs with no down payment required.
Getting mortgage down payment assistance in Arizona
While we have written about mortgage down payment assistance programs that are available in Phoenix proper, we failed to discuss some of the mortgage down payment assistance programs that are available to help out families who are looking to buy houses in other parts of the Valley or the state.
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HOME PLUS Home Loan Program
The Arizona Industrial Development Authority the HOME PLUS Home Loan Program to provide grants between zero percent and five percent on 30-year fixed-rate mortgages. To qualify for this program, the home in question must be owner occupied and the owner’s primary residence — not for a vacation home or income properties. Your household income must be below $92,984 and the purchase price of the new house can’t go above $371,936. One of the borrowers taking advantage of this mortgage down payment assistance program will also need to complete a homebuyer education course before closing as a condition of receiving the grant. This mortgage down payment program is not available in every county, and the amount that is available will depend on some other factors like which home mortgage you will be utilizing. Check out the Arizona Department of Housing’s website for more information, including specific details about down payment assistance.
Home in Five Advantage Down Payment Assistance Program
If you are looking to buy a home in Maricopa County, the Home in Five Advantage may be the down payment assistance program for you. With available down payment grants between 2.5 percent and 3.5 percent, this mortgage down payment program is unique because you do not have to be a first-time homebuyer to qualify. The program is also available for buyers purchasing condos, townhomes and the like. If you have a FICO score of 640 or better, qualify for an FHA, VA or USDA loan with a debt-to-income ratio that is 45 percent lower and has an income below $88,340, it is definitely worth checking out!
Beware of defunct down payment assistance programs
As real estate professionals, it is our job to remain abreast of the latest developments in all things having to do with real estate. That being said, there is a lot of misinformation out there and, frankly, things can change quickly. Before counting on any down payment assistance program being available to you, be sure to do your homework and give us a call. We have got your back and will make sure you have the latest information. For example, some real estate agents have mistakenly gotten their clients excited about mortgage down payment assistance programs that no longer exist …
Pathway to Purchase Down Payment Assistance Program
Administered by the Arizona Department of Housing (ADOH) along with the Arizona Home Foreclosure Prevention Funding Corporation (AHFPFC) and the Arizona Housing Finance Authority (AzHFA), the Pathway to Purchase Down Payment Assistance Program provided down payment assistance in 17 targeted municipalities in Arizona. Available to qualified homebuyers purchasing homes in the municipalities in question, the program acted as an added incentive to purchase a home in areas that were hit with a lot of foreclosures in the past. However, please be aware that this program ran out of funding in April of 2017 and there is no longer any down payment assistance available through this program.
Luckily, just as quickly as down payment assistance programs go away, new ones take their place. Let’s chat soon to talk about your situation, the help you need and what mortgage down payment assistance programs might be the right fit to get you into the perfect home for you and your family.