Great weather, amazing landscapes, and a relatively low cost of living are causing many people from major cities to move to Arizona. Arizona is one of the fastest growing states in the country and has incredible opportunities for people who want to buy homes in Arizona cities. Few people have the means to purchase a home without financing. Therefore, if you are looking to buy a home in Arizona, you should consider Home Plus Down Payment Assistance.
What Is The Home Plus Down Payment Assistance Program?
Making a down payment is often necessary when getting a mortgage. It is an obstacle many have to overcome before getting financing for a property purchase. The average down payment mortgage lenders require for a home purchase is 20%. However, with down payment assistance programs, it can be as low as 3%.
The Home Plus Down Payment Assistance Program is a program that first-time home buyers in Arizona can use to offset the price of buying a home. The housing loan program is provided by the Arizona Department of Housing and the Arizona Industrial Development Authority, or Arizona IDA, a nonprofit subdivision of the state of Arizona. The Home Plus Down Payment Assistance Program includes a thirty-year fixed rate mortgage and offers down payment assistance for up to 5% of the home’s price. The program helps you save money on your mortgage, and you can contribute it towards closing costs or the down payment.
Eligibility For The Home Plus Down Payment Assistance Program
The first step to qualifying for the home plus down payment assistance program is to find a qualified lender. You will work alongside the lender to ensure you meet the eligibility criteria for the program. You can find a list of lenders participating in the program on the DPA website.
It would be best to consider several things about the home plus down payment assistance program qualification, including program availability. You should ensure it is available in the city in Arizona where you want to buy a house.
You should also know that an earning cap exists to qualify for the program. To qualify for the program, a borrower’s income must be less than $109,000 per year.
Another essential criterion to note is that homebuyer education is necessary to qualify for the program. If buying the property as a couple, at least one of you must complete a homebuyer education course to get the loan.
Moreover, you must have a credit score of more than 640 to qualify for the home plus down payment assistance program. The program also requires borrowers to have a maximum debt-to-income ratio of 45% to 50%.
The maximum loan-to-value (LTV) amount to qualify for the Arizona home plus down payment assistance program varies from 96.50% to 97%. Since the maximum LTV is 97%, you must put down a down payment of at least 3% to get the mortgage.
Home Plus Down Payment Assistance Program Terms
The Home Plus Down Payment Assistance Program offers significant benefits for first-time home buyers, the biggest being the ability to make a down payment on a property purchase without extra expenses. However, you must understand the terms that come with the assistance. Arizona offers the Home Plus program, but it comes in two main types.
The first is a mortgage which is set up as a second mortgage. It has no interest, no payments but has loan forgiveness. The mortgage will be forgiven after the third year of home ownership, but you will have to pay the mortgage entirely if you sell or refinance it.
The second type of mortgage has no interest or payments and no loan forgiveness, so you must repay the loan.
If you are considering buying a home in Arizona for the first time, you should consider the Home plus Down Payment Assistance Program. It will make home ownership much easier, even with poor credit. Learn more about the assistance program to understand the terms better.