The Arizona Department of Housing

By Farhad Patny, M.S.B.A. Realtor, DPR Realty, Loan Modification & Short Sale Specialist

The Arizona Department of Housing (ADOH) is offering a 22 percent in purchase assistance to qualified homebuyers purchasing an eligible foreclosed home in the state. ADOH provides help in the form of a deferred second mortgage loan for purchase assistance. You could have a yearly income of upto $104,400, buy a home valued upto $346,250 in Maricopa and other Counties and still be eligible for the assistance.

The State of Arizona is using the majority of its Neighborhood Stabilization Program (NSP) funding to assist homeowners in purchasing foreclosed homes through a Down Payment Assistance Program (DPA). The program is available to residents of Maricopa, Cochise, Gila, Graham, Greenlee, Pima, Pinal and Santa Cruz Counties.

Your Way Home AZ is the statewide program designed to assist homebuyers purchasing foreclosed homes in select areas, help rehabilitate housing developments, and stabilize neighborhoods. Nine community partners - the state of Arizona, Maricopa County, Pima County, and the cities of Avondale, Chandler, Glendale, Mesa, Phoenix, Surprise and Tucson - have teamed up to use NSP funds for this purpose. Each partner has a slightly different program. Phoenix provides a Down Payment and Closing Cost Assistance of upto $15,000 to qualified candidates. Avondale, on the other hand, provides upto $25,000 of DPA and, in addition, provides upto $10,000 to conduct minor repairs to a home. To learn more about a specific program, visit the website and click on the appropriate community partner or feel free to call me.

Qualifications

Eligibility for the purchase assistance is based on a variety of factors. The household must have a gross income (the total income before taxes, health care costs, social security, etc.) of no greater than 120 percent of the average median income for the county they want to purchase a foreclosed house in. The table below (for Maricopa County only) will help you determine if your household qualifies.

MARICOPA COUNTY INCOME LIMITS:

• You must use a lender from the ADOH participating lender list.

 • If you own a residence, you must be leasing your primary residence at least 12 months before applying for the program.

• You must attend and complete an eight hour Homebuyer Education Class provided by one of the ADOH participating homebuyer counseling agencies.

• The property you purchase must be your primary residence.

• You must have a maximum debt to income ratio of 31/43.

• You must be AUS approved eligible.

• You must have two months PITI reserves.

Eligible Properties

• Foreclosed properties only. A property is considered “foreclosed upon” at the point that the mortgage or tax foreclosure is complete.

• One unit detached single family homes, condos and townhomes.

• The property must be vacant at time of listing.

• Property must be located in risk rated zip code.

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ADOH Loan Terms

• 22 percent of purchase price.

• All loans are forgivable after a period of time based on the amount of the loan.

·         5 years for assistance of $15,000 or less

·         10 years for assistance of $15,001-$40,000

·         15 years for assistance of more than $40,000

• All loans are zero percent interest with no monthly payment.

• The balance of the loan is forgiven at the completion of the term.

Down Payment Requirement

A minimum of 3 percent of the property purchase price is required as down payment. Only One percent must come from the borrower’s own funds. Two percent can come from any other approved source.

Home Purchase Price Limits

The maximum purchase price varies by county, minus 1 percent for program required discount. Please refer to the chart below:

For primary home buyers this is a golden opportunity to buy a home for pennies on the dollar with just 1% of their own funds. Today most homes are available for 40% to 70% less than its value in 2005. Reduce that amount with the $8,000 tax credit you would get from the IRS for buying a primary home. Also deduct the 22% down payment assistance that you can get from the ADOH. So if you buy a $100,000 home today (which was probably worth about $200,000 to $300,000 just a few years back), and if you qualify, and depending on the city’s program guidelines, you will get a DPA assistance of upto $22,000 in addition to the $8,000 IRS tax credit. All loans are zero percent interest with no monthly payment. The DPA funds are required to be paid back only when the home is sold or refinanced for cash out before 5-15 years.

How do I start?

For more information, please contact the Arizona Department of Housing. Or call Farhad Patny, Realtor, Short Sale and Loan Modification Specialist, at 623 297 4448, Email: [email protected]. Source: Arizona Dept. of Housing and Your Way Home AZ.