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Arizona First Time Home Buyer

First Time Home Buyer Mortgages - Down Payment Assistance Programs

Arizona First Time Home Buyer – 2020 Loan Programs

Are you a first time home buyer looking to purchase a home in Arizona?  On this page you can learn about the different types of mortgage programs that are available to first time home buyers.  You may also view the different down payment assistance programs that are currently being offered in Arizona.

Arizona First Time Home Buyer Loans

Below are some mortgage programs that are available to first time home buyers.

Types of Mortgages:

  • Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment.  If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI).  However, conventional loans also offer low down payment options, such as programs that only require 3% down.
  • FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan.  The qualification requirements for FHA loans are much more lenient than conventional loans.  This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
  • USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment.  These loans are intended for borrowers with low-to-moderate income.  In addition to not requiring any money down, you can also finance the closing costs into the loan.  This means you can essentially buy a home with no money out of pocket!
  • VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment.  These loans are not available to the general public, but exclusively to military/veterans.
  • Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan.  You can lookup the 2020 conforming loan limits for your county using this conforming loan limits calculator.  If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
  • Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan.  These programs are especially helpful to self-employed borrowers, and people with a variety of credit issues (such as low credit scores and/or a recent bankruptcy).  Regardless of your situation, you may considering learning more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.

These are some of the mortgage options that are available to first time home buyers. 

Would You Like to Get Pre-Approved for a Mortgage?
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Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Arizona.  You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.

Arizona Down Payment Assistance Programs

First time home buyers in Arizona have access to several excellent down payment assistance programs.  This includes the Home Plus Mortgage Program, the Home in Five Program, the Pathway to Purchase program, and the Pima Tucson Homebuyers Solution.

Home Plus Mortgage Program

This program provides home buyers with an opportunity to receive up to 5% of your mortgage loan in down payment assistance.  The assistance comes in the form of a “silent second mortgage”, which means that you do not have to make any payments on the money you receive.  The amount of the loan will be reduced by 1/36 over the course of 36 months.  At the end of the 3 year term, you will not owe anything.

Program Requirements

  • The home must be located in the state of Arizona (the program is available statewide).
  • The maximum purchase price allowed for a property is $396,680.
  • Your household income can not exceed $99,170.
  • The highest DTI ratio allowed is 45%.
  • One borrower must complete a home buyer education class.
  • The minimum credit score allowed is 640.
  • The property must be owner occupied (your primary residence).
  • This program can be used with a conventional, FHA, VA, or USDA loan.

To learn more about this program, please visit the Arizona Housing Finance Authority website.

Home in Five Program

Low and moderate income home buyers in Maricopa County may be eligible to receive up to 3% in down payment assistance with the Home in Five Program.  This program is available for both first time home buyers and repeat home buyers.

Program Requirements

  • The home must be located in Maricopa County.
  • The maximum purchase price allowed for a property is $371,930.
  • Your household income can not exceed $92,980.
  • The highest DTI ratio allowed is 45%.
  • One borrower must complete a home buyer education class.
  • The minimum credit score allowed is 640.
  • The property must be owner occupied (your primary residence).  You can purchase a single family residence, 2-4 unit property, town home, or condo.
  • This program can be used with a conventional, FHA, VA, or USDA loan.

Want to learn more?  Visit the official website for Maricopa County.

Pathway to Purchase Program

The Arizona Department of Housing offers a down payment assistance program to home buyers in 12 cities in Arizona.  The purpose of this program is to facilitate home purchase in certain housing markets that have experienced the high rates of foreclosures.  If you qualify, you may receive up to 10% of the purchase price (with a maximum amount of assistance totaling $20,000).

Program Requirements

  • The maximum purchase price allowed is $371,936.
  • Your household income must not exceed $92,984.
  • You may only purchase an existing home (no new construction allowed).
  • You must purchase a home in one of the following cities: Bull Head City, Casa Grande, Glendale, Green Valley, Kingman, Phoenix, Rio Rico, Sahuarita, Sierra Vista, Tucson, Vail, and Yuma.
  • You must use a Freddie Mac HFA Advantage mortgage.

To learn more about this program, please visit the Arizona Department of Housing website.

Pima Tucson Homebuyer’s Solution Program

This program offers home buyers (both first time home buyers and repeat home buyers) up to 5% in down payment assistance.  Borrowers receive assistance in the form of a “silent second mortgage”, which means that you do not have to make any payments on the money you receive.  The amount of the loan will be reduced by 1/36 over the course of 36 months.  At the end of the 3 year term, you will not owe anything.

Program Requirements

  • The home must be located in Pima County, including the City of Tucson.
  • Your household income can not exceed $99,169.
  • One borrower must complete a home buyer education class.
  • The minimum credit score allowed is 640 (a 660 is required to receive the full 5%).
  • The property must be owner occupied (your primary residence).
  • This program can be used with a conventional, FHA, VA, or USDA loan.

Want to learn more?  Visit the Pima Tucson Homebuyer’s Solution website.

Arizona First Time Home Buyer Tax Credits

The Mortgage Credit Certification tax credit provides you an opportunity to reduce your tax bill, as well as enhance your home loan application by reducing your debt-to-income ratios.  How this works, is you can deduct up to $2,000 off your federal tax bill each year.  The MCC allows up to 50% of your annual interest to be eliminated (with the cap being at $2,000).  Some great news, is this can be used in addition to standard mortgage interest deductions!

Are You Eligible for Down Payment Assistance?

A mortgage specialist can help you check your eligibility for down payment assistance.  If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form.  We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.

First Time Home Buyer Questions 

Below are some of the most frequently asked questions about first time home buyer loans:

How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program.  USDA and VA loans do not require any down payment.  FHA loans only require a 3.5% down payment (and allow down payment assistance to be used).  Conventional loans typically require either 3% or 5% down.   The minimum down payment for a non-prime loan is usually at least 10% (or higher).

What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in.  There are maximum loan limits for each type of mortgage program which are set at the county level.  Conforming loan limits are the maximum loan amounts allowed for conventional mortgages.  FHA loans have their own loan limits.  This is not necessarily how much you can borrow though, but the maximum amount allowed in your location.  The amount that you can personal qualify for will be based upon your income, and how much debt you have.  For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.

Can I buy a home without a real estate agent?
It depends on your state and the type of loan program.  For some states, you must use an agent.  In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages.  However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.

Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges.  The minimum credit score required for an FHA loan is 500.  For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500.  Non-prime loans also do not have any waiting periods after a bankruptcy.

Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.

Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.

Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband.  The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.

How do I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance.  If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Arizona.

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