2025 Arizona First-Time Homebuyer Programs and Loans

Buying a home is a huge financial milestone, requiring you to have your financial ducks in a row. Fortunately, homebuyers in Arizona can get a leg up when it comes to assistance with their down payment and/or closing costs.

Read on to learn about the programs that can make it easier to qualify for a mortgage and cover the costs involved with buying a home in Arizona, whether you’re a first-time homebuyer or you’ve already owned a home.

First-time homebuyer programs in Arizona

There are a handful of first-time homebuyer programs available for low- and moderate-income buyers in Arizona. Qualified borrowers may be able to use special mortgage programs, along with assistance programs for down payments and closing costs, to make their dream of homeownership a reality. First-time homebuyer programs in Arizona include:

• HOME+PLUS: Good option for all Arizona homebuyers
• Home in Five Advantage: Good option for single-family homes in Maricopa County
• Home in Five Platinum: Good option for homes with up to four units in Maricopa County
• Pima Tucson Homebuyers Solution Program: Good option for buyers in Pima County (including Tucson).

HOME+PLUS

The HOME+PLUS Home Buyer Down Payment Assistance Program is a state-run initiative available throughout Arizona. It offers a 30-year, fixed-rate mortgage with up to 4% of the loan amount in down payment assistance (DPA) for your down payment and/or closing costs. The DPA comes as an interest-free second mortgage that is fully forgiven after you live in the home for at least five years.

Requirements

• Maximum annual gross income of $136,609
• Minimum credit score of 620
• Completion of a homebuyer education course

Pros and cons

Home in Five Advantage

Home in Five Advantage is a down payment assistance program for both repeat and first-time homebuyers in Maricopa County (which includes Phoenix). Most qualified buyers can get up to 6% in down payment assistance through a forgivable second mortgage with a competitive interest rate.

Requirements

• Maximum income of borrowers on home title of $141,820
• Minimum credit score of 640
• Maximum debt-to-income ratio (DTI) of 50%
• Completion of an eight-hour homebuyer education course

Pros and cons

Home in Five Platinum

With Home in Five Platinum, you can receive a 30-year, fixed-rate mortgage and up to 4% of the loan amount in the form of a 0% second mortgage that you can use for your down payment, closing costs or other pre-closing expenses. You must be a first-time homebuyer to qualify; however, there is an exception for veterans and for homes in certain areas. Like Home in Five Advantage, this program is only available to people buying homes in Maricopa County.

Requirements

• Maximum household gross income of $130,900
• Minimum credit score of 640
• Sale price up to $660,515 for one-unit homes
• Two- to four-unit properties must be at least five years old
• Completion of eight-hour homebuyer education course

Pros and cons

Pima Tucson Homebuyers Solution Program

The Pima Tucson Homebuyer’s Solution Program (PTHS) is available for people who want to purchase a home in Pima County (including Tucson). This program offers a 30-year, fixed-rate mortgage with down payment and closing cost assistance in the form of a second loan that can be forgiven after you live in the home for three years. Through PTHS, you can get financing for up to 100% of your homebuying costs. In other words, you may not need any money for the down payment or other expenses related to the purchase of your home. The funds can also be combined with other down payment assistance and a mortgage credit certificate (more on this below).

Requirements

• Maximum income of $136,609 for most loans
• Minimum credit score of 640
• Maximum debt-to-income ratio (DTI) of 45%
• Completion of homebuyer education course

Pros and cons

Arizona first-time homebuyer qualifications

Arizonans might be surprised by who qualifies as a first-time homebuyer. According to the state’s Department of Housing, you belong in this category if you haven’t owned any part of your primary residence in the past three years. Most programs also have a maximum income limit and minimum requirements for your credit scores and down payment.

Steps to apply for a first-time homebuyer program

All homebuyer assistance programs in Arizona have different application requirements, but here’s what you can generally expect as you go through the process:

1. Research available options. Search for homebuyer programs in your state, county and city to see what you’re eligible for, based on your financial and credit situation. While the average credit score in Arizona is 712, many first-time homebuyer programs in the state accept scores as low as 640 or even 620.
2. Find a participating lender. To get started on finding a loan and financial support, you may need to choose a lender that works with the assistance program you’re interested in. You can meet with a participating loan officer, who can preapprove you for a loan and inform you about assistance programs for which you qualify.
3. Complete homebuyer education. Most first-time homebuyer programs require you to complete a homebuyer education course either in person or online. You’ll want to do this as early in the process as possible, since it will inform your buying experience and may help you save money on your loan.
4. Shop for a home. Use the program guidelines and your mortgage preapproval to guide your search for a home that meets the specifications for location and price. You can start searching for a home online, but you’ll want to find a real estate agent who can show you properties in person as well. Also, note that some Arizona homebuyer assistance programs are restricted to specific counties and are not available statewide.
5. Review and complete the paperwork. To close the deal, you’ll need to pay any fees due and review and sign paperwork from the lender and the homebuyer assistance program.

Understanding Arizona first-time homebuyer down payment assistance

Out of the 43 down payment assistance programs in Arizona, 32 had funds available as of the fourth quarter of 2024, according to Down Payment Resource’s homeownership program index. This means Arizona homebuyers have a good chance of securing assistance if they meet the minimum qualification requirements and plan to buy an eligible home.

That said, down payment assistance in Arizona comes in a few different forms. As you research your funding options, you may come across some unfamiliar terminology. Here’s an overview of what these assistance-related terms mean.

Deferred second mortgage

Requires repayment? Yes

A second mortgage — also known as a “junior lien” — is a loan you can use to cover your down payment and closing costs. If you have a deferred second mortgage, it doesn’t have to be paid until you sell the home — in which case you might use the proceeds to pay off the loan — or when you pay off or refinance your first mortgage.

Like a primary mortgage, your second mortgage will be secured against your house as collateral. Interest rates on second mortgages may be lower than rates on primary mortgages, but this is not always the case.

Forgivable second mortgage

Requires repayment? No

A forgivable second mortgage — often called a “soft second” mortgage — is a loan that can be forgiven if you meet specific requirements. These loans are usually forgiven gradually, by a small percentage each month or year, until you’ve lived in your home for a set period of time. If you sell your home before that period ends, you’ll have to pay the remaining balance. If you wait until the specified time has passed, you won’t have to repay the entire loan.

Grant

Requires repayment? No

Grants are a form of funding that eligible homebuyers can use to help cover their down payment and closing costs. You don’t have to repay the money you receive from a grant.

Mortgage credit certificate

Requires repayment? No

A mortgage credit certificate (MCC) allows you to claim a certain amount of mortgage interest payments as a federal tax credit each year. MCCs in Arizona are available for first-time homebuyers, veterans and buyers who have not owned a residence in the past three years. Income and purchase price limits may apply. Note: This program was temporarily suspended through April 15th earlier this year, so make sure to verify its availability.

Keep these things in mind about DPA programs

Remember that some down payment assistance comes in the form of a second mortgage that can be forgiven if you remain in the home for a certain amount of time. If you plan to buy a home with one of these programs but anticipate moving in the next few years, you may be required to pay back the loan with proceeds from the sale. You may also have to repay this assistance if you refinance your mortgage before the second mortgage is forgiven.

How much of a down payment do I need to buy a house in Arizona?

first-time buyers in Arizona put down an average of $29,815 for their down payments in 2023, according to LendingTree’s latest first-time homebuyer study, and their average mortgage amount was $320,328. In other words, our mortgage statistics show these buyers put down 9.31%, on average.

Whether you pay more or less depends on a number of factors, including the type of loan and, if applicable, the homebuyer assistance programs you use. For example, with an FHA loan, your down payment could be as low as 3.5%.

Can I qualify for down payment assistance in Arizona?

There are several down payment assistance programs in Arizona, and you may qualify for one or more of these programs, especially if you have low-to-moderate income. To find out what’s available, search for programs from the state, as well as your city and county, and check to see if you meet the relevant requirements.

How do I apply for Arizona first-time homebuyer down payment assistance?

You’ll need to meet with an approved lender to apply for HOME+PLUS, the state of Arizona’s primary first-time homebuyer down payment assistance program. The same is true for the Home in 5 Platinum program. You can find an approved lender for Home in 5 Platinum online and search for Home+Plus lenders at HomePlusAZ.com.

 Here’s what you need to know about the process of applying for a home loan.

Other first-time homebuyer loan programs

Conventional loans

Whether you’re a first-time homebuyer or a repeat buyer, a conventional loan could meet your needs. These home loans are not insured by a government agency (unlike FHA and VA loans). The requirements to qualify for a conventional loan may be higher than other loan types, but conventional loans usually offer competitive interest rates and cost less overall than government loans. This is partly because you don’t have to pay private mortgage insurance (PMI) on conventional home loans if you make a down payment of 20% or more.

FHA loans

FHA loans are backed by the Federal Housing Administration (FHA) and offered through private lenders. These loans are often the most affordable option for borrowers with low down payments and low credit scores. FHA loans allow down payments as low as 3.5% and are available for single-family homes and multifamily homes with up to four units. FHA loan rates can be competitive.

VA loans

VA loans are loans backed by the U.S. Department of Veterans Affairs (VA) and available through private mortgage lenders. You might qualify for one of these loans with low annual percentage rates (APRs) and no mortgage insurance if you’re a veteran, service member or eligible spouse, even with no down payment.

USDA loans

You might qualify for a loan backed by the U.S. Department of Agriculture (USDA) if you’re a low-to-moderate income borrower looking to buy a home in an eligible rural area. You don’t need a down payment and depending on your income, the interest rate on your USDA loan could be as low as 1% to 4.5%.

What are the best first-time homebuyer loans?

There’s no single loan that works best for every first-time homebuyer. To narrow down your best option, look for the most affordable loan based on your income, credit and down payment.

Home price trends in Arizona’s major areas

If you live in Arizona, you’ve probably noticed that homes are getting more and more expensive each year. Data from the Arizona Research Center for Housing Equity and Sustainability shows that median home prices statewide increased 57% from April 2019 to April 2023, mostly because the housing supply is not increasing fast enough to meet the increasing demand.

Home prices were also on the rise throughout 2024, although some areas fared worse for homebuyers than others. In the Phoenix-Mesa-Chandler metro area, which includes Maricopa and Pinal Counties, home prices increased by 3.14% in the fourth quarter of 2024 compared to the previous year and 69.09% over the previous five-year period. Tucson saw a 2.30% year-over-year increase, along with a five-year increase of 65.73%.

Prices went up most in Flagstaff, where the year-over–year increase was 3.84% and the five-year surge was 71.47%.

Is there a first-time homebuyer tax credit in Arizona?

Arizona homebuyers who want a tax break may be able to apply for the state’s Mortgage Credit Certificate (MCC) program, which gives you up to $2,000 in annual tax credit for the interest you’ve paid on your mortgage. However, this program appears to be temporarily suspended through April 15, 2025. At the federal level, the most recent tax credit for homebuyers expired in 2010.

What are the current mortgage rate trends in Arizona?

Mortgage interest rates in Arizona depend largely on the qualification requirements for borrowers and the loan type they apply for. However, information on average rates for Arizona homebuyers can easily be found online.

Data from the Consumer Financial Protection Bureau (CFPB) shows that most lenders in Arizona are currently offering rates on 30-year mortgages that are at or below 7.375% for consumers with credit scores ranging from 640 to 659. The rates on a 15-year fixed mortgage in the state may be at or below 6.375% for the same type of borrowers.

The current mortgage rate predictions from LendingTree experts forecast that interest rates will remain above 6% into 2025.