How to Buy a House in Phoenix with No Money Down
BOTTOM LINE UP FRONT: Two federal loan programs — VA and USDA — allow Phoenix-area buyers to purchase a home with zero down payment. For buyers who do not qualify for either, Arizona’s DPA programs (Home Plus, Home in Five Advantage, City of Phoenix Open Doors) can stack with FHA or conventional loans to reduce out-of-pocket costs to near zero.
Zero down is real. It is also program-specific, income-limited, and geography-constrained — particularly for USDA, where most of core Phoenix, Goodyear, Peoria, and Surprise do not qualify. VA is the stronger zero-down vehicle for eligible veterans buying anywhere in the Phoenix Metro.
This post maps every zero-down and near-zero path available to Phoenix buyers in 2026, the income and credit requirements for each, and a stacking example showing how far DPA can stretch a limited cash position.
The Terrain: What Zero Down Actually Costs in Phoenix
ARMLS data through January 2026: 24,358 active listings, $444,740 median sale price, 94 average days on market. West Valley entry range: $380,000-$434,000 in Goodyear, Surprise, and Buckeye.
5% down on a $400,000 West Valley home = $20,000. For a household earning $75,000-$95,000, that is 20-27% of gross annual income saved for a single transaction cost — before closing costs, inspections, and moving expenses. The barrier is not income. It is liquidity. That is the problem zero-down programs are designed to solve.
Current rate environment (Bankrate, March 16, 2026): 30-year fixed purchase rates averaging 6.14% in Arizona. VA loan rates running 6.0-6.5% in Arizona — typically 0.25-0.5% below conventional because of the VA guarantee structure. Seller concessions present in approximately 56% of closings (ARMLS January 2026). A buyer’s market compounds the effect of zero-down programs: sellers are currently contributing to closing costs on more than half of all transactions.
Path 1: VA Loan — Zero Down for Eligible Veterans
The VA home loan is the single most favorable mortgage product available to any Phoenix buyer who qualifies. Zero down payment, no PMI at any LTV, and rates that typically run below conventional — it is not a niche workaround. It is the strongest first-purchase instrument in the market for eligible veterans, active-duty service members, and eligible surviving spouses.
- Down payment: Zero — no loan amount cap for full entitlement buyers
- Mortgage insurance: None — ever, at any LTV
- 2026 conforming limit: $832,750 (Maricopa County) — relevant only for partial entitlement
- Funding fee (first use, zero down): 2.15% — financeable into the loan; waived for disability-rated veterans
- Arizona VA rates, Feb 2026: 6.0-6.5% (30-year fixed)
- Credit score: VA sets no minimum; most lenders require 620
- Eligible properties: Primary residence — single-family, VA-approved condos, multi-unit up to 4 units
The Funding Fee Math
On a $430,000 purchase (Goodyear median range), the VA funding fee at first use, zero down = 2.15% = $9,245. This can be financed into the loan, meaning a buyer bringing zero cash to closing finances a $439,245 loan instead of $430,000 — adding approximately $56/month. Veterans with a service-connected disability rating of 10% or higher pay zero funding fee.
| Scenario | Purchase Price | Down Payment | Funding Fee | Monthly P&I (6.25%) |
|---|---|---|---|---|
| VA, full entitlement, 1st use | $430,000 | $0 | $9,245 (2.15%) — financed | $2,706 |
| VA, disability exempt | $430,000 | $0 | $0 (waived) | $2,648 |
| VA, subsequent use | $430,000 | $0 | $14,190 (3.30%) — financed | $2,737 |
| VA, 5% down | $430,000 | $21,500 | $6,128 (1.50%) — financed | $2,558 |
| Conventional, 5% down + PMI | $430,000 | $21,500 | None | ~$2,518 + ~$170/mo PMI |
The PMI comparison: A conventional buyer with 5% down pays PMI until they reach 80% LTV — approximately 8-10 years on a $430,000 loan. A VA buyer with zero down pays no PMI ever. Over 10 years, that is roughly $20,400 in PMI savings ($170/month x 120 months), which largely offsets the VA funding fee in total cost of ownership.
VA + Home Plus Stack: Zero Out of Pocket
For VA-eligible buyers who also want to cover closing costs: the Arizona Home Plus DPA program offers 3% assistance when paired with a VA loan. On a $430,000 purchase, 3% = $12,900 toward closing costs. Phoenix VA closing costs typically run $8,000-$12,000 (excluding the funding fee, which is financed). With Home Plus at $12,900, a VA buyer can realistically close with zero cash out of pocket.
Home Plus + VA eligibility: Minimum 640 FICO, household income under $105,291, must work through an approved Home Plus lender. The income limit is notably lower than standard VA income qualification — confirm before assuming eligibility.
Path 2: USDA Loan — Zero Down for Rural and Suburban Buyers
The USDA Rural Development Guaranteed Loan Program is the second true zero-down option. Less discussed than VA — and far more geography-constrained in the Metro.
- Down payment: Zero
- Upfront guarantee fee: 1.0% of loan amount (financeable)
- Annual fee: 0.35% of remaining balance (added to monthly payment)
- Income limit: $119,850 for households of 1-4 (Maricopa County, 2026)
- Credit score: 640 FICO preferred by most USDA-approved lenders
- Primary residence only
- ⚠ CRITICAL: Most of core Phoenix Metro does NOT qualify geographically
Where USDA Works in the Phoenix Metro
USDA eligibility is determined by property address. Every address must be verified at eligibility.sc.egov.usda.gov before assuming eligibility. Maps are updated periodically.
| Submarket | USDA Eligible? | Notes |
|---|---|---|
| Core Phoenix (central) | No | Ineligible — dense urban classification |
| Goodyear (established areas) | No | Most of Goodyear proper is ineligible |
| Peoria | No | Core Peoria ineligible |
| Surprise | No | Core Surprise ineligible |
| Buckeye (outer/far west) | Partial — verify address | Far west Buckeye may qualify; inner Buckeye does not |
| Waddell / Morristown | Partial — verify address | Rural pockets may qualify |
| Tonopah / Wickenburg area | Likely yes | Outer Maricopa County; strong USDA coverage |
The honest assessment on USDA in the Phoenix Metro: if you are targeting Goodyear, Peoria, Surprise, or established Buckeye neighborhoods — USDA is likely not your path. The geographic restriction is a hard wall. For buyers in eligible outer areas, USDA’s annual fee (0.35%) is meaningfully lower than FHA’s annual MIP (0.55%), making it the more cost-effective zero-down structure where geography allows.
Path 3: DPA Programs — Near-Zero for Non-VA/USDA Buyers
For buyers who do not qualify for VA and cannot find an eligible property for USDA, Arizona’s DPA ecosystem can reduce cash-to-close to near zero when stacked correctly with FHA financing.
Home Plus Arizona (Statewide)
| Parameter | Details |
|---|---|
| DPA amount | 2%-5% of first mortgage loan amount |
| Structure | Forgivable second mortgage (forgiven over 3 years) |
| Income limit (2026) | $105,291-$146,503 depending on loan type |
| Credit score minimum | 640 FICO |
| Loan types | FHA, VA, USDA, conventional (Fannie Mae / Freddie Mac) |
| Geographic coverage | Statewide — all of Arizona |
| First-time buyer required? | No — repeat buyers eligible |
| VA pairing | 3% DPA toward closing costs when used with VA loan |
Home in Five Advantage (Maricopa County Only)
| Parameter | Details |
|---|---|
| DPA amount | Up to 6% of loan amount (5% standard; +1% for teachers, first responders, military, or income under $49,500) |
| Structure | Forgivable second mortgage — forgiven after 3 years |
| Income limit (2026) | $138,600 household income |
| Credit score minimum | 640 FICO |
| Loan type | FHA, VA, USDA — 30-year fixed only |
| Geographic coverage | Maricopa County — all West Valley submarkets covered |
| First-time buyer required? | No — veterans and repeat buyers eligible |
| DTI maximum | 50% |
City of Phoenix Open Doors
| Parameter | Details |
|---|---|
| DPA amount | Up to 10% of purchase price or $15,000 (lesser amount) |
| Structure | Forgivable loan — 15-year term |
| Income limit | 80% AMI (approximately $62,000 for a family of 4) |
| First-time buyer required? | Yes |
| Geographic coverage | City of Phoenix jurisdictional boundaries only |
The Stack: How Zero Down Works in Practice
The power of Phoenix’s DPA ecosystem is in combination. A buyer using only one program may still have cash-to-close exposure. Stacked correctly with seller concessions, the gap closes significantly.
Loan: FHA at 6.25% (30-year fixed) | FICO: 650 | Household income: $88,000
FHA minimum down payment (3.5%): $14,000
FHA closing costs (estimated): $8,500
Total cash needed without DPA: $22,500
DPA Layer 1 — Home in Five Advantage at 5%: $20,000 (covers down payment + partial closing costs)
DPA Layer 2 — Seller concession (56% of Phoenix closings): $5,000 toward remaining closing costs
Buyer cash-to-close: approximately $0-$2,500 (reserves and prepaids only)
Note: Home in Five income limit ($138,600) and 640 FICO minimum must be met. FHA MIP applies to monthly payment.
Loan: VA at 6.25% (zero down) | FICO: 680 | Household income: $98,000
Funding fee 2.15%: $9,245 — financed into loan (no cash required)
Home Plus DPA 3%: $12,900 toward closing costs
Estimated VA closing costs: $9,000-$11,000
Buyer cash-to-close: $0-$1,500 (prepaids and escrows only)
This is the closest thing to a truly zero out-of-pocket transaction available in the Phoenix Metro in 2026.
What Zero Down Does Not Eliminate
Zero-down programs remove the down payment requirement. They do not eliminate every cost.
| Cost Item | Typical Range | Can DPA Cover? | Can Seller Cover? |
|---|---|---|---|
| Home inspection | $350-$550 | No | Sometimes |
| Appraisal | $500-$700 | Sometimes | Yes (as concession) |
| Prepaid homeowners insurance | $1,200-$2,000 | Yes (some programs) | Yes |
| Property tax escrow (2-6 months) | $500-$2,500 | Yes (some programs) | Yes |
| Title and escrow fees | $1,200-$2,000 | Yes (some programs) | Yes |
| VA funding fee (if not exempt) | 2.15% of loan | No — financed into loan | Allowed (VA 4% concession cap) |
| Moving costs | $800-$3,000 | No | No |
The seller concession variable: With 56% of Phoenix closings including seller concessions and 94 average days on market, negotiating leverage is real. A well-structured offer in the current West Valley market can combine DPA coverage with a seller concession request for prepaids and title fees — compressing cash-to-close to a number most buyers can manage from savings rather than requiring the full down payment amount.
Frequently Asked Questions
Can I use a VA loan more than once in Phoenix?
Yes. VA is a lifetime benefit. Full entitlement buyers who sold their prior VA-financed home and paid off the loan can reuse the benefit with no down payment and no loan limit. Buyers with an active existing VA loan can use remaining entitlement, with the 2026 Maricopa County conforming limit of $832,750 determining zero-down buying power for partial entitlement calculations.
What credit score do I need for zero-down programs in Arizona?
VA loans: most lenders require 620 minimum; some approve at 580 with strong compensating factors. USDA: 640 FICO preferred. Home Plus and Home in Five Advantage: 640 FICO minimum for both. A buyer with a 610 score has a VA-only path until the score improves.
Do zero-down loans have higher interest rates?
VA loans typically price at or below conventional rates — not above. The VA guarantee reduces lender risk. Arizona VA rates in February 2026 were running 6.0-6.5% compared to 6.14% conventional (Bankrate, March 16, 2026). Home Plus and Home in Five loans may price slightly above market rates because the DPA subsidy is embedded in the structure — compare the full APR on the Loan Estimate, not just the stated rate.
Is the zero-down purchase price limited in Arizona?
For VA with full entitlement: no limit. A veteran with full entitlement can purchase any price point in Phoenix with zero down. For USDA: the Maricopa County FHA limit ($524,225) applies, but the income restriction ($119,850) is typically the binding constraint before the loan limit. For Home Plus and Home in Five: purchase price limits follow the applicable loan type limits (FHA: $524,225; conventional conforming: $806,500 in Maricopa County).
Can I buy new construction with zero down in Phoenix?
Yes, with VA and USDA programs. Many West Valley new construction communities (Goodyear, Surprise, Buckeye) work with VA-approved lenders. Home in Five Advantage covers new construction in Maricopa County. West Valley builders are currently offering rate buydowns and closing cost incentives — stacking a builder incentive with DPA is worth exploring on new construction purchases specifically.
How long do I have to stay for the DPA to be forgiven?
Home in Five Advantage: forgiven after 3 years. Home Plus: forgiven over 3 years (approximately 33% per year). City of Phoenix Open Doors: 15-year forgivable term. Buyers planning to stay 3+ years in the West Valley — reasonable given current market conditions — will have most DPA fully forgiven before any sale or refinance decision.
What is the income limit for zero-down programs in Phoenix?
VA loan: no income ceiling. USDA: $119,850 for a household of 1-4 (Maricopa County, 2026). Home Plus: $105,291-$146,503. Home in Five Advantage: $138,600. City of Phoenix Open Doors: approximately $62,000 for a family of four (80% AMI). VA is the only zero-down option with no income ceiling — critical for buyers in the $150,000+ household income range who qualify on VA but are excluded from DPA programs.
Can a non-veteran buy with zero down in Phoenix?
Outside VA, USDA is the only true zero-down option — and most core West Valley properties do not qualify geographically. For non-veterans in ineligible USDA areas, the practical path is near-zero: Home in Five at 5-6% DPA plus seller concessions can reduce cash-to-close to under $2,500 on a $400,000 FHA purchase. Not technically zero, but functionally achievable for a household with limited savings.
Schedule Your Consultation
For the full breakdown on DPA program stacking, VA eligibility, and what zero-down options apply to your specific income, credit, and target submarket — that analysis is exactly what a consultation with Ron and Jill covers. Zero down in the Phoenix Metro is achievable. The path depends on your service history, income, credit, and target geography. The first move is knowing which path applies to you.
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