For those buying a home, there are some options when it comes to securing a loan. There are government-backed loans— such as the FHA, VA, and USDA— and there are conventional loans. Often lesser-known by prospective buyers is there are some options regarding down payment assistance, including the Home in Five Program.
The Home in Five Program applies to those purchasing solely in Maricopa County, but can cover up to eight percent of the loan amount towards the down payment. While you don’t have to be a first-time buyer, there are other qualifying factors. More on that in a bit.
Home in Five Background
The Industrial Development Authorities of Maricopa County and the City of Phoenix are working in conjunction to aid homebuyers obtain FHA, VA or USDA-Rural Development loans to purchase a home anywhere within Maricopa County, including the city of Phoenix. Families or individuals who qualify would be able to procure a 30-year fixed rate loan and 8% down payment or closing cost assistance grant, with special incentives for eligible US military personnel.
Financing for these loans is applicable towards new or existing homes, condos, and townhouses on a first-come/first-served basis.
Homebuyer Requirements
In order to receive an assisted loan, borrowers must have a minimum FICO credit score of 640. They must have a debt-to-income (DTI) ratio less than 45%, meaning the amount owed— credit cards, auto, student, or other debt (including the loan)— must be less than 45% of the income of the borrowers. Standard loan guidelines will persist based on the loan obtained, i.e. adequate income, acceptable credit, and a down payment requirement.
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.
Further, income for all borrowers must be lower than $88,340 and the loan amount cannot exceed $484,350.
Down Payment Assistance
For all homebuyers qualifying for down payment assistance, a maximum of 8% of the original loan amount to be used towards a down payment and/or closing costs. This assistance is considered a grant and does not need to be repaid.
Qualified United States military personnel*, teachers, first responders, fire fighters, EMTs, and some prison workers may be entitled to an additional 1% down payment/closing cost assistance, for a maximum of 8%.
*Qualified United States Military Personnel includes Qualified Veterans, active duty United States military, active United States Reservists, and active members of the National Guard. A “Qualified Veteran” is a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable (as provided in 38 U.S.C.Section 101).