By Grant Edrington – Updated April 4, 2023
Looking to buy a home in the Grand Canyon state? Current Arizona home prices are high and first-time homebuyers may find it challenging to afford a home. To address this issue, numerous government and non-profit organizations offer first-time homebuyer programs and grants to help first-time homebuyers with down payments, closing costs, and other homebuying expenses.
We’ll provide an overview of some of the first-time homebuyer programs and grants available in Arizona, including eligibility requirements, program benefits, and how to apply. By taking advantage of these programs, first-time homebuyers can achieve their dreams of homeownership and enjoy the many benefits that come with it.
Ready to see what Divvy can do for you? Explore Our Rent-to-Own Homes in Arizona.
Shopping for your first home in another state? Check out our full first-time homebuyer program guide here.
How to Qualify for First-Time Homebuyer Programs in Arizona
To qualify for down payment assistance programs in Arizona, first-time homebuyers will typically need to meet certain income and credit score requirements. Each program may have its own eligibility criteria, but common requirements include:
- Being a first-time homebuyer or not having owned a home in the past three years
- Meeting income limits set by the program
- Having at least the minimum credit score proposed by the program
- Completing a homebuyer education course
- Using the home as your primary residence
- Meeting the program’s home purchase price limits
Taking advantage of homebuying assistance programs can help make your dream of homeownership more affordable and accessible.
2023 Arizona Homebuyer Statistics
These statistics should help give you an idea of recent homebuying conditions in Arizona:
- Median listing price statewide for February 2023: $319,707
- Median time homes are on the market in 2022: 70 days
- Appreciation rate: Comparing 2021 to 2022, Phoenix has a home appreciation rate of 20.16%, higher than nearly 90% of the rest of the country.
Arizona Industrial Development Authority’s HOME+Plus Program
With HOME+Plus, you can secure a 30-year fixed-rate mortgage and qualify for down payment assistance of up to 5%, which is available for conventional, FHA, VA, or USDA loans.
While you’ll need to choose a lender from the program’s list of partners and complete a homebuyer education course, these are standard requirements for most programs for first-time homebuyers. Keep in mind that there are also income limits for eligibility, with a cap of $112,785 for most loans.
Although the mortgage rate may be slightly higher than other programs, the lower mortgage insurance premiums can offset that. HOME+Plus AZ requires a minimum credit score of 640, which is higher than some other programs, such as FHA loans, which have a minimum score of 580. Visit the HOME+Plus AZ website for more information.
You can also explore Divvy’s Guide to First-Time Home Buyer Programs. We’re here to help!
Local First-Time Homebuyer Programs Throughout Arizona
In addition to statewide first-time homebuyer programs, there are also several local programs available throughout Arizona that can help make homeownership more affordable for eligible buyers.
Home in 5 Advantage Program for Phoenix and Maricopa County
The Home in Five Advantage program is an option for low- to moderate-income homebuyers in Maricopa County who need some extra help with downpayment and/or closing costs. With this program, you can get a 30-year fixed-rate conventional loan, FHA or VA loan, and even a forgivable second loan to help cover your expenses.
If you’re a K-12 teacher, first responder, military personnel, veteran, or earn up to $39,500 annually, you may qualify for an additional 1% in assistance.
The program offers up to 5% of the home’s purchase price in assistance with a second mortgage that’s fully forgiven after three years of living in the home. Here are some important benefits and qualifications to keep in mind:
- Your annual income must not exceed $112,785
- All borrowers must have a credit score of at least 640 (680 for some loans)
- The maximum debt-to-income (DTI) ratio allowed is 50%
- No maximum purchase price
- At least one borrower must complete a homebuyer education course
- Buyers must occupy the purchased home as their primary residence within 60 days of closing
The home can be a new or existing single-family home, condo, or townhome.
Additionally, buyers in designated low-income neighborhoods could qualify for an extra 0.5% in assistance through the Home in Five Advantage BOOST program. Your lender can help you determine if you’re eligible for this added support.
Arizona Home Plus Mortgage Program
The Arizona Home Plus Mortgage Program is available to Arizona homebuyers across all counties. The program offers a three-year soft second mortgage to help cover downpayment and closing costs up to as much as 5% of the mortgage loan. The Arizona Home Plus Mortgage Program is a no-interest, no-payment assistance program that is forgiven monthly at a rate of 1/36 over the term of the loan. It can also be combined with any government-backed mortgage program.
In order to qualify, homeowners must have a:
- Maximum income of $122,100
- Maximum debt-to-income ratio of 50%
- Minimum FICO score of 640
Additionally, the Arizona Home Plus Mortgage Program does require homeowners to provide a minimum amount towards their closing costs. The program can potentially cover all down payment and closing costs. If a homeowner is a qualified active member or veteran of the U.S. military, they are eligible for an additional 1% of down payment assistance.
Chandler First Time Homebuyer’s Program
The First Time Homebuyer’s Program in Chandler offers affordable homeownership opportunities for low-income, first-time buyers who may be priced out of the current housing market.
You can qualify for this program if your household income is below 80% of the area median Income. Administered by the Newtown Community Development Corporation, the program uses a Community Land Trust model, which means you only pay for the home and not the land.
You’ll need to complete homebuyer education classes, meet with a homeownership counselor, and attend an orientation to learn about the program’s terms and conditions.
Tucson Down Payment Assistance Program
If you’re looking to buy a home in Pima County, the City of Tucson’s HOME down payment assistance program might be worth checking out. This program, which is available countywide and administered by Pima County, can provide loan amounts of up to 10% of the purchase price without any monthly payments.
The program can also be combined with other approved down payment assistance resources to potentially cover up to 20% of the total subsidy, making it possible for you to avoid private mortgage insurance on a conventional loan.
Although Divvy doesn’t currently operate in Tucson, keep checking back as we expand our offerings throughout Arizona.
Explore the Advantages of Using Divvy to Buy Your First Home
If you’re a first-time homebuyer in Arizona and looking for affordable options, check out Divvy as an alternative to traditional programs.
Divvy offers some unique advantages, including more relaxed financial requirements and the ability to rent your home before committing to purchasing it. Part of your monthly payment can count toward your down payment savings, too. If, after a few years of renting, you decide you don’t want to purchase the home, you can walk away with your savings, minus a 2% relisting fee and any other unpaid costs for rent or damages.
With Divvy, you’ll have access to a selection of ready-to-rent Divvy homes and the reliable purchasing expertise of our team.
Learn more about Divvy and how it works.
Note: Divvy is not affiliated with the first-time homebuyer programs mentioned in this article. Be aware that requirements for these programs may change. We recommend consulting with a lender or real estate agent when evaluating first-time home buyer programs.
Arizona First-Time Homebuyer FAQs
How much do first-time homebuyers need to put down in Arizona?
As a first-time homebuyer in Arizona, the amount you’ll need to put down depends on several factors, such as the price of the home you’re purchasing and the type of mortgage you choose.
If you qualify for an FHA loan, you may be able to put down as little as 3.5%. Additionally, some loan programs, such as VA and USDA loans, allow for 0% down payment for eligible borrowers.
It’s important to note that putting down less than 20% may result in the need to pay private mortgage insurance (PMI), which can add to your monthly mortgage payment.
What credit score Is needed to buy a house in Arizona?
In Arizona, a credit score of at least 620 is generally needed to qualify for a conventional home loan. However, an FHA loan may be available to individuals with a credit score as low as 500. Lenders also consider other factors such as debt-to-income ratio, employment history, and overall financial stability when determining your eligibility for a mortgage.
What are the best programs for first-time homebuyers in Arizona?
Arizona offers several programs for first-time homebuyers, including HOME+Plus AZ, the Home in Five Advantage program, and the Tucson HOME down payment assistance program. Other options to consider include local programs and Divvy, an alternative to traditional programs that offers a wider range of home options and more lenient financial requirements.
Ultimately, the best program for you will depend on your individual financial situation and homebuying goals.
- Arizona Downpayment Assistance (https://www.arizonadownpaymentassistance.com/down-payment-programs/)
- National Association of Realtors: Arizona Realtors Housing Report
- Norada Real Estate: Phoenix Real Estate Market (https://www.noradarealestate.com/blog/phoenix-real-estate-market/)
- Home Plus: Arizona Homebuyer Down Payment Assistance (https://homeplusaz.com/guidelines_credit_information/)
- Arizona Industrial Development Authority
- Home Plus: Pre-Purchase / Home Buyer Education Information
- Arizona Home Plus Mortgage Program (https://www.arizonadownpaymentassistance.com/down-payment-programs/#HomePlus)
- Home in 5: Maricopa County
- Family Housing Resources Tucson: Down Payment Assistance
- Pima County / City of Tucson: New HOME DPA Fact Sheet
- Chandler, Arizona: First Time Homebuyer’s Program
- Newtown Community Development Corporation