Down Payment Assistance

 

Arizona Department of Housing

“HOMES FOR ARIZONANS”

 

Who is eligible?

Families, including single people who are first time homebuyers and whose yearly income does not exceed 80% of the area median income where the housing unit will be purchased, are eligible.  The following chart shows the income limits by family size. When a family is eligible, it does not automatically qualify them to buy a home.  The family must apply to a bank or mortgage company for a home loan and must also meet the lender’s requirements.

County	1 person	2 persons	3 persons	4 persons	5 persons	6 persons
Apache	22750	26000	29250	32500	35100	37700
Cochise	24550	28050	31550	35050	37850	40650
Coconino	29000	33150	37300	41450	44750	48050
Gila	23200	26500	29800	33100	35750	38400
Graham	22750	26000	29250	32500	35100	37700
Greenlee	27450	31350	35300	39200	42350	45450
LaPaz	22950	26250	29500	32800	35400	38050
Mohave	33100	37850	42550	47300	51100	54850
Navajo	22750	26000	29250	32500	35100	37700
Pinal	32800	37500	42200	46900	50650	54400
Santa Cruz	24650	28150	31700	35200	38000	40850
Yavapai	26000	29700	33400	37100	40100	43050
Yuma	22750	26000	29250	32500	35100	37700

Where can a house be purchased and what types of houses can be purchased?

The family must purchase a housing unit located in one of the Arizona counties on the following list.  The type of house purchased may be a single-family (one unit), condominium, townhouse, cooperative, or manufactured unit that is permanently affixed to a foundation and on land owned by the family.  The value of the house that is purchased cannot exceed the following limits.

County	Maximum Value		County	Maximum Value
Apache	$213,750		LaPaz	$200,160
Cochise	$200,160		Mohave	$244,600
Coconino	$342,000		Navajo	$233,840
Gila	$247,000		Pinal	$263,150
Graham	$200,160		Santa Cruz	$200,160
Greenlee	$200,160		Yavapai	$295,830
			Yuma	$200,160

The housing unit that is purchased, with the assistance, must be occupied by the family as a primary residence.  This means the housing unit cannot be rented or left vacant during this period.

Can I purchase a “Fix-Up” property? What type of condition can the property be in?

No.  The housing unit must meet minimum property standards that require the unit is in safe condition and that major systems such as the roof, heating, cooling, plumbing and electrical are expected to last at least three years before repairs are needed.  The property will be inspected for these standards but not guaranteed by the State.  The family should carefully select a home based on these expectations and may wish to purchase a home inspection and home warranty.

How much assistance will be provided?

The actual amount of the assistance is dependent upon five factors: the amount of family income, the purchase price of the house, the actual closing costs on the house, the amount of family savings and assets, and any other gifts or assistance the family may be receiving.  The maximum amount of assistance is $20,000.

When must the assistance be repaid?

In general, the assistance must be repaid if the family sells the property or fails to occupy the property as a primary residence.  These restrictions are spelled out in legal documents that must be signed at the time the house is purchased.

How much must families contribute to the purchase of their house?

Families must contribute at least 3% of the purchase price of the house. If the family is receiving a gift or other assistance or is participating in a special loan program, it must still contribute at least $1,000 of its own funds.  The family may also be responsible for other costs.

Are there other program requirements?

Families receiving assistance must participate in and complete a series of classes or individual meetings that explain the Homes for Arizonans requirements, the home buying process, and the family’s responsibilities.  These meetings are free and are held in various locations and at various times throughout the year.  The agency in your area can provide you with additional information regarding these classes and other program requirements.

Call Country Ranch GMAC Real Estate  to help you understand and take advantage of the first-time homebuyer tax credit and get started finding your  home. 1-800-784-2612 ext. 7500

HOMES FOR ARIZONANS” INITIATIVE LIEN TERMS:

 

 

The Homes for Arizonans closing cost subsidy comes in the form of a grant. The Homes for Arizonans down payment subsidy constitutes an interest-free, payment-deferred loan to be repaid upon sale of the home, refinance, non-occupancy, or change in title, whichever may occur first.  The beneficiary on the Deed of Trust will be the Arizona Dept of Housing or the Arizona Housing Finance Authority.  All loans will be serviced by the beneficiary after closing. Borrowers may refinance only if the payments are lowered and no cash is received.  Other conditions may apply therefore you must contact the beneficiary before beginning any such process.  The Homes for Arizonans Initiative is a Fannie Mae and FHA approved secondary financing assistance program.  A Promissory Note and Deed of Trust recorded in second lien position secures the Homes for Arizonans Initiative assistance.

 

The first mortgage amount should be no less than 80% Loan-to-Value.  Closing costs, interest rate and borrower fees must be reasonable and in accordance with local custom and prevailing rates. Debt ratios may be no more than 33/41%.  Please note, Lender’s qualifying income may differ from the program qualifying income and therefore debt ratios may differ between Lender and the HOMES FOR ARIZONANS program.

 

Program guidelines require that the borrowers contribute a minimum of 3% of their own funds towards the down payment.  If the family is receiving a gift, other assistance, or participating in a special loan program, they must still contribute at least $1,000 of their own funds.  They may also be responsible for other costs. Borrower’s first mortgage must be a 30 year fixed rate loan; no adjustable rates are permitted with this program.  Taxes and insurance must be impounded and no pre-payment penalties are allowed. Lender interest rates, broker fees and yield spread premiums are subject to program approval.

 

 

 

 

 Follow these steps for easy process into this program:

 

1.      Submit a “HOMEBUYER ASSISTANCE PRE-APPLICATION” to determine eligibility for the    program. (THIS FORM MUST BE MAILED OR BROUGHT IN – ONLY ORIGINALS WILL BE ACCEPTED)

 

2.      A  Letter of Eligibility with the dates and time of the next “Homebuyer Education & Counseling Workshop’s” will be mailed to you. You must call and reserve a seat for this class!

 

3.      After completing workshop, schedule a Pre-Qualifying appointment with our Housing Counselor.     At that appointment you will receive a Closing Date.

 

4.       Choose a Lender, submit a loan application. Get a written loan approval letter and give your lender

 our contact information. (see below)

 

5.      Choose a Realtor and start shopping for a home. Give your realtor our contact information (see     below) and have them contact us prior to signing a purchase contract.

 

6.      Realtor sends us a copy of your fully accepted Purchase Contract with Contingency and all Addendums.   Along with our “Request for Property Inspection”. We will set up a date and time for inspection.

 

7.       A “Reservation of Funds” will be sent to your lender.

 

8.       Confirm Closing Date with your Lender, Title Company and HAC Housing Counselor.

 (HAC = Housing America Corporation)  

 

Congratulations! Soon you will own your new home!

 

 

WHAT DOES THE LENDER NEED TO DO?

q       Credit qualifies the borrower (Debt ratios must not exceed 33/41% & Loan Origination Fee must not exceed 1%)

q       Provide the “hOMES FOR aRIZONANS” Housing Counselor with copies of the written Credit Approval Letter, Good Faith Estimate, Appraisal, Copy of the Preliminary Title Report, 1003 Application; and 1008 Transmittal/MCAW worksheet and home owners insurance company and phone.

q       Notify the “hOMES FOR aRIZONANS” Housing Counselor when closing documents are to be drawn to coordinate closing. (At least 48 hours prior to closing)

 

WHAT DOES THE REALTOR NEED TO DO?

q       Assist borrower with the Purchase Contract, ensuring that program contingencies are included in purchase offer. (Realtor should call HAC with any questions).

q       Mail, fax or e-mail a copy of the fully accepted purchase contract, with Contingency and all Addendums to the “Homes for Arizonans” Housing Counselor.

q       Coordinate property access to the “Homes for Arizonans” Housing Counselor for Home Inspection to be performed; coordinate with all parties for any required repairs to be negotiated and completed for re-inspection prior to closing.

 

WHAT DOES THE HOME BUYER PROVIDE?

q       All required “hOMES FOR aRIZONANS” program documentation, including proof of insurance coverage and proof of own funds for contribution and the $30.00 application fee.

q       Ensure that the Lender and the Realtor have sent their required paperwork to the “hOMES FOR aRIZONANS” Housing Counselor.

 

WHAT DOES THE “HOMES FOR ARIZONANS” HOUSING COUNSELOR NEED TO DO?

q       Processes Pre-Application, Conduct Homebuyer Education class, Pre-Qualify client.   

q       When the Housing Counselor receives the Purchase Contract, the written Credit Approval letter, and a copy of the Appraisal from the Lender, a “Reservation of Funds” letter will be mailed or faxed to the Buyer, Lender and Title Company outlining the terms and amount of assistance reserved for the borrower.

q       Inspect the home, prepare Closing documents that include but is not limited to Escrow Instructions, Promissory Note, Deed of Trust, and Property Inspection Certificate. Arrange for funds to be ready for closing. Work with Lender, Realtor, and Title Company to insure a timely closing. Review final HUD-1 prior to disbursement of “Homes for Arizonans” assistance.

 

Call Country Ranch GMAC Real Estate  to help you understand and take advantage of the first-time homebuyer tax credit and get started finding your  home. 1-800-784-2612 ext 7500