The biggest barrier to homeownership is often saving enough for a down payment and closing costs. Fortunately, Arizona offers numerous down payment assistance (DPA) programs that provide grants, forgivable loans, and second mortgages to help qualified buyers achieve homeownership sooner. At Todd Uzzell Home Loans, we specialize in pairing buyers with the right assistance programs to minimize out-of-pocket costs.
How Down Payment Assistance Works
Down payment assistance programs provide funds to help cover your down payment and sometimes closing costs. These funds come in several forms—grants that don't need to be repaid, forgivable loans that are forgiven over time, or second mortgages with favorable terms.
Many Arizona homebuyers don't realize they qualify for assistance, even if they're not first-time buyers. Income limits are often higher than expected, and programs exist for various professions, locations, and circumstances.
Down Payment Assistance by the Numbers
Typical assistance amounts available
Programs available statewide
Of buyers underestimate eligibility
Down payment with some programs
Types of Down Payment Assistance
Grants (Free Money)
No RepaymentGrants provide money that never needs to be repaid. These are the most desirable form of assistance.
- • Amount: Typically $2,500-$15,000
- • Repayment: None required
- • Requirements: Income limits, homebuyer education
- • Best for: First-time buyers, low-to-moderate income
Forgivable Loans
Forgiven Over TimeSecond mortgages that are forgiven after you meet residency requirements (typically 3-5 years).
- • Amount: $5,000-$40,000
- • Repayment: Forgiven over 3-5 years of occupancy
- • Requirements: Stay in home, remain current on mortgage
- • Best for: Those planning to stay long-term
Deferred Payment Loans
Pay at Sale/RefiSecond mortgages with 0% interest that are due when you sell, refinance, or pay off your first mortgage.
- • Amount: Up to 6% of purchase price
- • Repayment: Due at sale, refinance, or payoff
- • Interest: Usually 0% or very low
- • Best for: Long-term homeowners
Matched Savings Programs
Savings MatchPrograms that match your savings contributions, often at 3:1 or 4:1 ratios.
- • Amount: Varies by program
- • Match Ratio: Often 3:1 or 4:1
- • Requirements: Homebuyer education, save over time
- • Best for: Those with time to save
Arizona Housing Finance Authority (AZFA) Programs
The Arizona Housing Finance Authority is the state's primary source of down payment assistance, offering multiple programs for qualified Arizona buyers.
Home Plus Program
Forgivable LoanThe most popular AZFA program, providing up to 5% of the loan amount for down payment and closing costs.
Key Features:
- • Up to 5% of loan amount (typically $10,000-$20,000)
- • 0% interest rate
- • Forgiven after 10 years of occupancy
- • Can be used with FHA, VA, USDA, or Conventional
- • Recorded as a second mortgage
Eligibility:
- • Income limits: $110,000-$130,000 (varies by county)
- • Credit score: Minimum 640 for Conventional, 620 for FHA
- • First-time buyer OR hasn't owned in 3 years
- • Complete homebuyer education course
- • Property must be primary residence
PATH (Professional Assistance to Homeownership)
5% ForgivableDesigned for essential workers including teachers, healthcare workers, law enforcement, and military personnel.
Key Features:
- • 5% down payment assistance
- • 0% interest
- • Forgiven after 10 years
- • Combined with Home Plus for maximum assistance
Eligible Professions:
- • K-12 Teachers and school employees
- • Healthcare workers
- • Law enforcement and firefighters
- • Military (active duty or veterans)
- • Arizona National Guard
Pathway to Purchase
Grant + Low RateCombines down payment assistance with below-market interest rates for maximum savings.
Benefits:
- • 3.5% or 5% down payment assistance
- • Reduced interest rate (0.25%-0.50% below market)
- • Lower monthly payments
- • Can save $50-$100/month on payment
Requirements:
- • Income at or below 80% AMI
- • Credit score 640+ (Conventional)
- • Complete homebuyer education
- • Available in targeted areas
Local & County Programs
In addition to statewide programs, many Arizona cities and counties offer their own down payment assistance:
City of Phoenix
- • HOME Investment Program: Up to $15,000 forgivable loan
- • Requirements: Income limits, targeted areas
- • Forgiveness: 5-year residency
Pima County (Tucson)
- • HOPE Program: Up to $20,000 assistance
- • Requirements: First-time buyers, income limits
- • Type: Deferred loan, 0% interest
Maricopa County
- • First-Time Buyer Grant: $5,000-$7,500
- • Requirements: Income under $75,000
- • Type: True grant, no repayment
City of Mesa
- • Homeownership Program: Up to 4% of purchase price
- • Requirements: Moderate income, targeted areas
- • Type: Forgivable after 10 years
City of Tempe
- • DPA Program: $3,000-$10,000
- • Requirements: City employees priority
- • Type: Deferred second mortgage
Yavapai County (Prescott)
- • Rural Housing Assistance: Varies
- • Requirements: Rural areas, income limits
- • Type: Often combined with USDA loans
Note: Program availability and funding varies. Some programs have limited annual funding and operate on a first-come, first-served basis. Apply early in the year for best availability.
Arizona Income Limits for DPA Programs
Most down payment assistance programs have income limits based on Area Median Income (AMI). Limits vary by county and household size.
| County | 1-2 Person Household | 3+ Person Household |
|---|---|---|
| Maricopa (Phoenix) | $110,520 | $126,880 |
| Pima (Tucson) | $99,360 | $114,080 |
| Pinal | $95,040 | $109,120 |
| Yavapai (Prescott) | $91,800 | $105,400 |
| Coconino (Flagstaff) | $105,600 | $121,200 |
*2025 income limits for 80% AMI programs. Some programs allow up to 100% or 120% AMI, which increases limits by 25-50%. Contact us to verify current limits for your household size and county.
Combining DPA with Different Loan Types
DPA + FHA Loans
The most common combination for first-time buyers.
- ✓ FHA requires: 3.5% down (580+ credit)
- ✓ DPA can cover: Full 3.5% + closing costs
- ✓ Result: Buy a home with $0 out-of-pocket
- ✓ Credit score: As low as 580 with some programs
DPA + Conventional Loans
Better rates with good credit, but stricter requirements.
- ✓ Conventional requires: 3-5% down
- ✓ DPA can cover: Down payment + some closing costs
- ✓ Credit score: Typically 640-660 minimum
- ✓ Benefits: Lower rates, cancel PMI sooner
DPA + VA Loans
Veterans can use DPA for closing costs even with $0 down.
- ✓ VA requires: $0 down for eligible veterans
- ✓ DPA can cover: Closing costs and VA funding fee
- ✓ Credit score: Typically 580-620 minimum
- ✓ Benefits: True $0 to close option
DPA + USDA Loans
Rural buyers can stack DPA with $0 down USDA loans.
- ✓ USDA requires: $0 down in eligible rural areas
- ✓ DPA can cover: All closing costs
- ✓ Income limits: Must qualify for both programs
- ✓ Location: Rural and some suburban areas
How to Qualify for Down Payment Assistance
✓ Common Requirements
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1.
Income Limits
Most programs: Under $110,000-$130,000 depending on household size and county
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2.
First-Time Buyer Status
Haven't owned a home in the past 3 years (or meet other definitions)
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3.
Homebuyer Education
Complete approved 6-8 hour course (online or in-person)
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4.
Primary Residence
Property must be your primary home (no investment properties)
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5.
Credit Score
Typically 580-640+ depending on program and loan type
❌ Disqualifying Factors
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×
Current Homeownership
Owning another property may disqualify you from first-time buyer programs
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×
Income Too High
Exceeding income limits (though limits are often generous)
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×
Investment Property
DPA is for primary residences only, not rentals or second homes
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×
Credit Issues
Recent bankruptcy, foreclosure, or scores below minimums
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×
Property Type
Some programs exclude condos, manufactured homes, or certain property types
The DPA Application Process
Complete Homebuyer Education
Most programs require a HUD-approved homebuyer education course. These are available online (8-10 hours) or in-person (full day workshops).
Cost: $75-$150 | Time: 1 day
Get Pre-Approved for a Mortgage
Apply for pre-approval with a lender who offers DPA programs. We'll help you determine which assistance programs you qualify for.
Time: 1-3 days
Apply for DPA Programs
Submit applications for specific programs. Your lender typically handles this process and coordinates with the assistance program administrators.
Time: 1-2 weeks for approval
Find Your Home
Work with a real estate agent to find a home that meets program requirements (price limits, condition standards, location).
Timeline: Varies
Close on Your Home
At closing, your down payment assistance funds are applied to your down payment and/or closing costs, reducing your out-of-pocket expenses.
Time: 30-45 days from offer acceptance
Pros & Cons of Down Payment Assistance
✓ Advantages
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✓
Buy Sooner: Don't wait years to save a down payment
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✓
Lower Out-of-Pocket: Reduce or eliminate upfront costs
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✓
Build Equity: Start building wealth through homeownership
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✓
Competitive Edge: Sellers see you as a qualified buyer
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✓
Rate Protection: Lock today's rates rather than waiting
× Considerations
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×
Repayment Terms: Some programs require repayment if you sell early
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×
Higher Rates: DPA may add 0.125%-0.5% to your interest rate
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×
Limited Availability: Programs can run out of funding
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×
Occupancy Requirements: Must live in home for specified time
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×
Price Limits: Purchase price caps may limit home choices
Down Payment Assistance Available Throughout Arizona
Down Payment Assistance FAQs
Do I have to repay down payment assistance?
It depends on the program. Grants never require repayment. Forgivable loans are forgiven after 3-10 years of occupancy. Deferred loans must be repaid when you sell, refinance, or pay off your first mortgage. Always review specific program terms.
Can I use DPA if I'm not a first-time buyer?
Maybe! Many programs define "first-time buyer" as someone who hasn't owned a home in the past 3 years. Others are available to anyone meeting income requirements. Some programs specifically for repeat buyers do exist.
Will down payment assistance hurt my interest rate?
Some programs add a small premium (0.125%-0.5%) to your rate, but this is often worth it for the upfront savings. We'll help you run the numbers to see if DPA makes financial sense for your situation.
How much down payment assistance can I get?
Amounts typically range from $2,500 to $40,000 depending on the program, purchase price, and your qualifications. AZFA's Home Plus program alone can provide up to 5% of the loan amount, and you may be able to combine multiple programs.
Are there income limits for down payment assistance?
Yes, most programs have income limits, typically ranging from $90,000 to $130,000 depending on county and household size. However, these limits are often higher than people expect, and many middle-income families qualify.
Can I use DPA with a VA or USDA loan that already requires $0 down?
Yes! Even with $0 down loans, you still have closing costs. Down payment assistance can cover these costs, resulting in a true $0 to close transaction.
Discover Your Down Payment Assistance Options
Let's find the programs you qualify for and create a plan to get you into your Arizona home with minimal out-of-pocket costs.
Or email us at [email protected]
Down payment assistance specialists available to help you qualify