Can new state program provide first time home buyers loans?


grantBy Philip Haldiman, Editor in Chief | The Dealmaker

Yes, the housing market in the Valley is flat.

One reason that get bandied around is potential buyers’ inability to make down payments.

But there’s one mortgage product that could tilt the balance toward homeownership for those unable to financially handle up to 4 percent down.

Arizona Housing Finance Authority, on behalf of the Arizona Department of Housing, offers a non-repayable grant on competitive 30-year fixed-rate mortgages.

The Home Plus mortgage program includes a non-repayable grant for down payment and closing costs, equal to up to 4 percent of the initial principal balance of the mortgage loan.

Qualified U.S. Military personnel may receive an additional 1 percent for a total of up to 5 percent.

Dirk Swift, program administrator at the Arizona Housing Finance Authority, said requirements include a FICA score of at least 640 and a maximum household income of about $88,340. The loan cap is $353,360.

“That is the demographic we are targeting, but the homebuyer must be credit worthy,” Swift said.

Tim Jorden, regional sales manager at Homeowners Financial Group, said the program came out last year, and is now being used more frequently because more homebuilders are marketing it.

He said it opens up the housing market for those who think they might not be able to purchase a home.

“The program can help people who are lacking in a down payment or closing costs or both,” Jorden said.

Troy Wahlberg, land acquisition manager with William Lyon Homes, said the Home Plus program could help bridge the gap as the down payment is less than conventional loans and it allows a higher loan amount than current FHA limits, Wahlberg said.

“I think if we can get back to some old fashioned lending that makes sense and overcomes shortcomings with compensating factors, we could see a significant increase in qualified buyers,” he said.

If approved for this grant, homebuyers are required to complete a homebuyer education course, either online, or through a HUD-approved homebuyer education provider.

Wahlberg said the grant is another vehicle allowing people to buy, and could bring a new level of buyer into the market. But it needs some tweaks, he said.

“It’s close, and it fills a void that I think is relevant, but the income limit needs to raise,” he said. “Also, the ability to qualify or use one income is useful instead of having to factor the whole household income against the cap.”

The Homebuyer must be approved for a mortgage through a participating lender to obtain eligibility for the Home Plus program. More information can be found at:

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