Can Phoenix Buyers Get a Loan for a Down Payment?
The Terrain: Why Down Payment Is the Barrier
ARMLS January 2026: 24,358 active listings, $444,740 median sale price, 94 average days on market, 5.17 months supply, 59.6% of closings below list price. West Valley entry range $380,000–$434,000.
At a $400,000 purchase price in the West Valley, a 3% conventional down payment is $12,000. Add 2% to 3% in closing costs and that buyer needs $20,000 to $24,000 in liquid assets before they can close. For a household earning $90,000 per year, accumulating $20,000 in liquid savings while covering rent and other costs is a 2- to 3-year project at realistic savings rates.
That math is why down payment assistance programs exist. The problem is not buyer credit or income in most cases — it is the gap between what buyers can borrow and the upfront cash required to close. DPA programs are built to close exactly that gap.
The Weather: What Most Buyers Get Wrong About DPA
Down payment assistance carries a stigma in some buyer circles — a perception that it is for distressed buyers or a sign of overextending. That framing is wrong. Most DPA programs are structured specifically for creditworthy buyers who qualify for a mortgage but have not had the runway to accumulate upfront cash — exactly the profile of a recent graduate, a young family, or someone who relocated to Phoenix in the last few years.
The more accurate concern about DPA programs is rate. Most programs pair the assistance with a first mortgage through an approved lender, and those rates can run 0.25% to 0.50% above the best available market rate. That trade-off deserves a real calculation, not dismissal. In many cases the higher rate is offset by reduced mortgage insurance costs and the ability to close without depleting reserves. Run the numbers before deciding.
The Three Structures: Grant, Forgivable Loan, and Second Mortgage
🆕 Outright Grant
No repayment under any circumstances. True grants are the least common structure in Arizona’s major DPA programs — most programs using the word “grant” are actually forgivable loans with specific conditions attached.
⏳ Forgivable Second Mortgage
The most common Arizona structure. A lien on the property forgiven incrementally over 3–7 years. Sell or refinance before the term expires? Repay the unforgiven balance from sale proceeds. Hold through the term? The balance is fully discharged.
💰 0% Repayable Second Mortgage
No interest, no monthly payment, but full repayment required upon sale, transfer, or refinancing regardless of how long the buyer occupies the home. Used by the Pathway to Purchase program.
The Programs: What Is Available to Phoenix Buyers in 2026
| Program | Assistance | Structure | Income Limit | First-Time Req. |
|---|---|---|---|---|
| Home in Five Advantage | Up to 5% (6% heroes) | Forgivable 3–7 yr | $138,600 | No |
| Home Plus (Arizona Is Home) | Up to 5% | Forgivable 3 yr | $146,503 | No |
| City of Phoenix Open Doors | Up to 10% / $15K cap | Forgivable | 80% AMI | Yes (3 yr) |
| Pathway to Purchase | Up to $20,000 | 0% 2nd mortgage | $92,984 | Targeted ZIPs |
| WISH Grant (FHLBank) | Up to $32,099 (4:1 match) | Grant | 80% AMI | Yes |
Administered by the Phoenix and Maricopa County IDAs. The most widely used DPA program in the Phoenix metro. Available anywhere in Maricopa County with no purchase price limit. First mortgage is a 30-year fixed FHA, VA, or conventional loan through an approved participating lender. Reference: Arizona IDA Home Plus / Home in Five (arizonaida.com).
- Assistance: Up to 5% of first mortgage loan amount. Up to 6% for K-12 teachers, first responders, active military/veterans, and income-qualified borrowers earning up to $49,500 annually
- Structure: Forgivable second mortgage — 3-year term for the standard 5% tier; 7-year term for the 6% hero tier. Forgiven monthly. Repayment of unforgiven balance required if sold/refinanced before term expires
- Income limit: Qualifying income cannot exceed $138,600 for all borrowers on the loan
- Credit: Minimum 640 FICO for all borrowers
- DTI: Maximum 45%
- First-time buyer requirement: None for the standard Advantage tier
- Education: 8-hour HUD-approved homebuyer education course required
- BOOST supplement: Additional 0.5% for buyers in low-income census tracts or with income at/below 50% AMI ($46,550). Combined with the hero tier, maximum total assistance can reach 6.5%
The Arizona Industrial Development Authority’s statewide program. Available in all counties, all cities, all ZIP codes. Pairs with FHA, VA, USDA, or conventional financing.
- Assistance: 0% to 5% of first mortgage loan amount; buyer selects the tier that best fits their scenario
- Structure: Forgivable second mortgage forgiven after 3 years of occupancy. Prorated repayment if sold/refinanced before 3 years
- Income limit: Household income cannot exceed $146,503
- Credit: Minimum 640 FICO
- DTI: Maximum 45% (50% if FICO is 680+)
- First-time buyer requirement: None
- Rate note: The first mortgage rate is set by the program and may run 0.25%–0.50% above prevailing market rates. Compare the full APR against non-DPA alternatives before committing
Administered by the City of Phoenix Housing Department. Targeted to income-qualified buyers purchasing within Phoenix city limits. Contact: (602) 262-3111.
- Assistance: Up to 10% of purchase price, maximum $15,000
- Structure: Forgivable; specific forgiveness terms vary — confirm with the city program directly
- Income limit: Household income cannot exceed 80% of Area Median Income. In 2026, 80% AMI for a 4-person household in Phoenix MSA is approximately $76,150
- First-time buyer requirement: Yes — must not have owned a home in the past 3 years
- Geographic restriction: Property must be within Phoenix city limits
Administered by the Arizona Department of Housing. Available in 26 designated ZIP codes across 12 Arizona cities including Phoenix and Glendale.
- Assistance: Up to $20,000 as a second mortgage
- Structure: Zero interest, no monthly payment, 5-year lien. Full repayment required upon sale, transfer, or refinancing — the balance does not forgive over time
- Income limit: Annual income cannot exceed $92,984
- Purchase price limit: $371,936
- Requires: Fannie Mae HFA Preferred first mortgage; HUD-approved homebuyer education course
- Important: Confirm your property address falls within a qualifying ZIP code before relying on this program
A matching grant through credit unions and community lenders participating in the Federal Home Loan Bank of San Francisco’s Affordable Housing Program. Availability is fund-dependent — not always open.
- Assistance: 4-to-1 match up to $32,099. For every $1,000 the buyer contributes, they receive up to $4,000 in matching grant funds
- Structure: True grant — does not require repayment if buyer occupies the home for 5 years
- Income limit: Household income at or below 80% AMI
- First-time buyer requirement: Yes
- Funds are limited and released in rounds — apply early through a participating lender
The Rate Trade-Off: What DPA Actually Costs
Every DPA program pairs the assistance with a first mortgage originated through an approved lender at a program rate. That rate is not always the lowest available. The honest assessment:
Home in Five and Home Plus first mortgage rates may run 0.25% to 0.50% above the best available 30-year fixed conventional rate. On a $380,000 first mortgage, 0.50% over 30 years adds approximately $42,000 in total interest. However, these programs often pair with reduced mortgage insurance premiums that partially or fully offset the rate premium.
Gift Funds: The Other Legal Source
DPA programs are not the only path to a funded down payment. All major loan types allow gift funds from specific sources to cover the down payment with proper documentation.
- Conventional loans: Gift funds from family members. Must be a true gift with no expectation of repayment. Lender requires a gift letter and documentation of the transfer
- FHA loans: Gift funds from family members, close friends with documented relationships, employers, labor unions, and certain charitable organizations
- VA loans: Gift funds allowed; follow lender-specific documentation requirements
- USDA loans: Gift funds from family members with proper documentation
How to Stack Programs
Multiple assistance sources can sometimes be combined, but not all programs allow stacking. Home in Five Advantage can be combined with the BOOST supplement for qualifying buyers, reaching up to 6.5% total assistance. Mortgage Credit Certificates (MCCs) — which provide a federal tax credit on mortgage interest paid each year — can be paired with most Arizona DPA programs and are worth evaluating separately with your tax advisor.
Two first-mortgage programs cannot run simultaneously. The DPA second mortgage is tied to the program’s first mortgage. Evaluate whether the program’s first mortgage terms are competitive before committing. For the full down payment strategy picture, see our earlier post on Do Phoenix Buyers Need to Put 20% Down?
Frequently Asked Questions
Is a down payment assistance loan the same as borrowing your down payment?
Functionally similar in structure but legally different. Down payment assistance programs are specifically approved to work with the primary mortgage without triggering DTI restrictions. The assistance is typically structured as a forgivable second mortgage that requires no monthly payments, meaning it does not increase your DTI for underwriting purposes. A personal loan used for a down payment — which is generally not allowed under most mortgage program guidelines — would count as a liability and affect DTI.
Do I have to be a first-time buyer to qualify for down payment assistance in Phoenix?
Not for the two most widely used programs. Home in Five Advantage and Home Plus both allow repeat buyers who meet income and credit requirements. The City of Phoenix Open Doors Program and the WISH Grant require that buyers have not owned a home in the past three years. If you owned a home previously and are re-entering the market, confirm which programs are available before assuming you do not qualify.
Can I use down payment assistance with a VA loan?
Yes. Home in Five Advantage and Home Plus both allow VA first mortgages paired with the DPA second mortgage. Since VA loans require zero down payment, the assistance in that scenario is most commonly applied to closing costs and prepaid expenses rather than the down payment itself — potentially resulting in a zero-out-of-pocket closing for qualifying VA buyers.
What happens to the DPA second mortgage if I refinance?
If you refinance before the forgiveness period expires, the unforgiven balance of the DPA second mortgage becomes due at the time of refinancing. For programs with 3-year forgiveness terms, buyers who refinance within 36 months will owe a prorated portion of the original assistance. If you anticipate refinancing within the forgiveness window, factor potential repayment into the overall cost analysis before selecting the program.
Are there income limits for down payment assistance programs in Phoenix?
Yes, all major programs have income limits. Home in Five Advantage caps qualifying income at $138,600. Home Plus caps household income at $146,503. City of Phoenix Open Doors requires household income at or below 80% AMI (approximately $76,150 for a 4-person household in 2026). Pathway to Purchase caps income at $92,984. WISH requires income at or below 80% AMI. Buyers above these thresholds do not qualify regardless of other factors.
How do I apply for down payment assistance in Phoenix?
All major Arizona DPA programs work through approved participating lenders — you do not apply directly to the state agency. Find a lender approved for the specific program you are targeting. Home in Five and Home Plus both publish lender directories on their program websites. Most programs also require an 8-hour HUD-approved homebuyer education course before closing.
Can down payment assistance be used to buy in Goodyear, Buckeye, or Surprise?
Yes. Home in Five Advantage covers all of Maricopa County — including Goodyear, Buckeye, Surprise, Peoria, Anthem, Litchfield Park, Waddell, and Glendale. Home Plus covers all of Arizona statewide. Both programs have no purchase price limit, meaning buyers in the current West Valley entry range of $380,000–$434,000 are fully eligible. City of Phoenix Open Doors is restricted to Phoenix city limits; confirm your specific address before relying on that program.
Schedule a Consultation With Ron and Jill
Down payment assistance programs have income limits, lender approval requirements, forgiveness timelines, and rate trade-offs worth understanding before selecting one. For buyers in Goodyear, Buckeye, Surprise, Peoria, or Anthem, the right program is often the difference between buying this year and waiting another two. Schedule the consultation to map your specific scenario against what is available right now.
