Purchasing a property for first-time homebuyer can sometimes feel a bit overwhelming. First, you need a good REALTOR® to represent you. Then, you must make sure your financials are in order. That includes your downpayment. If you find your funds a little short, consider utilizing the downpayment assistance program Home Plus Arizona to make your home purchase a little easier.
Home Plus Downpayment Assistance Program
What is Home Plus Arizona?
The Arizona IDA oversees the non-profit Home Plus Arizona program. Buyers may qualify for up to 5% of the home’s purchase price to fund either their downpayment, closing costs, or both if needed. Of course, certain restrictions apply for this downpayment assistance program. And the amount available to the buyer(s) depends on the sale price of the home in question as well as the creditworthiness and income level of the buyer.
How Does Home Plus Work?
First, a buyer/buyers must qualify for a 30-year fixed-rate Home Plus Loan. That means contacting a lender well-versed in the Home Plus program. To find one, visit the Home Plus website. They provide information on several different types of loans available for you through the program (FHA, VA, Freddie Mac, Fannie Mae, etc.). Once you choose which loan you wish to use, they pre-qualify you for a loan. After you find the property you are interested in, you go back to your lender with the specifics. In turn, they reserve your funds for you.
The Home Plus Arizona home loan and downpayment assistance programs do not penalize you for early payment. You do not need to be a first-time homebuyer in order to qualify for the program. Lenders consider this a “silent second” by attaching a lien to the property. However, the program requires no interest or payment as long as you do not sell or refinance in the first three years you live there. After those three years, this lien is totally forgiven.
The total household income to qualify for the Home Plus downpayment assistance program cannot exceed $109,965 (as of the writing of this post). Also, borrowers’ credit scores must be at least 640. You cannot exceed a 50% debt-to-income ratio. At least one of the borrowers must complete the program’s Home Buyer Education Course before the final closing on the property. And the home in question must be used as your primary residence. Manufactured homes and construction-to-perm home loans are not allowed for this program.