The City of Phoenix Open Doors Homeownership down payment assistance program is designed to assist qualifying first-time homebuyers attain their dream of owning an affordable home in the city of Phoenix, Arizona. Based on the need of the applicant, the program provides up to $15,000 to be put towards the down payment and/or closing costs. In contrast to some of the other DPA programs, Open Doors is a bit more strict with the rules, which we’ll go into below.
Unlike the Home in Five, Home Plus, Arizona HFA Preferred, and the Pima Tucson Homebuyer’s Solution programs, the Open Doors program is only for first-time buyers (defined as having no ownership within the previous three years (36 months)). Since this is a program aimed to help buyers find an affordable home, the maximum purchase price is capped at $208,000. A must for this program is buyers must occupy the home as their principal residence within 60 days of closing and for the duration of the loan. This is open only to purchasing a home; refinancing, cash withdrawal, and other mortgage possibilities is not an option.
The grant is combined with an FHA 30-year fixed-rate mortgage. Loan financing applies to existing homes, condos (but not condo conversions), or townhouses, and will need to pass an inspection.
While up to $15,000 can be obtained through the program, if the property is sold within 15 years, repayment is due upon said sale or change in residency. Otherwise, the loan is forgiven after 15 years. This program can be stacked with other homeownership assistance programs.
All homebuyers qualifying for DPA will receive a grant on an as-needed basis, though not all applicants will qualify for the full grant amount.
As this program works with a government-backed, FHA loan, standard regulations will exist, such as having adequate income, but not that which exceeds 80% of the area median income (AMI, which is a statistic by HUD for the purposes of determining the eligibility of applicants for certain federal housing programs). Please refer to the chart to determine the allowable income amounts for your household size. FHA Acceptable credit and debt-to-income (DTI) ratio guidelines are also qualifying factors.
Buyers must invest a minimum of $1,000, or meet the primary lender’s requirements if the amount is more than $1,000. FHA loans require 3.5% of the purchase price as a down payment, of which half must come from the homebuyer’s own funds, and not a gift.
Additionally, all buyers must attend a homebuyer education course, receiving a certificate of completion. A home inspection is also required. Prospective buyers can find a list of HUD-approved Housing Counseling agencies providing the course locally through hud.gov. Buyers will also have to meet with a housing counselor through one of two housing agencies that are approved through this program.
For more information on the City of Phoenix Open Doors Homeownership down payment assistance program, contact your local licensed loan officer to determine if this path toward buying your first home is the right for you and your family.