Maricopa County Down Payment Assistance

If you are a home buyer in Maricopa County looking for another online resource about down payment assistance and other first time home buyer programs, go here: Maricopa County Down Payment Assistance for First Time Home Buyers

Maricopa County Down Payment Assistance Blog

Hey, if you're a home buyer looking for down payment assistance in Maricopa County, you're in luck! Visit http://maricopacountydownpaymentassistance.blogspot.com to learn more.

USDA Loans

Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.

Eligibility: Applicants for loans may have an income of up to 115% of the median income for the area. Area income limits for this program are here. Families must be without adequate housing, but be able to afford the mortgage payments, including taxes and insurance. In addition, applicants must have reasonable credit histories.

Approved lenders under the Single Family Housing Guaranteed Loan program include:

• Any State housing agency


• Lenders approved by:




• HUD for submission of applications for Federal Housing Mortgage Insurance or as an issuer of Ginnie Mae mortgage backed securities


• the U.S. Veterans Administration as a qualified mortgagee


• Fannie Mae for participation in family mortgage loans


• Freddie Mac for participation in family mortgage loans




• Any FCS (Farm Credit System) institution with direct lending authority


• Any lender participating in other USDA Rural Development and/or Farm Service Agency guaranteed loan programs

There is no required down payment. The lender must also determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt.

Standards: Under the Section 502 program, housing must be modest in size, design, and cost. Houses constructed, purchased, or rehabilitated must meet the voluntary national model building code adopted by the state and HCFP thermal and site standards. New Manufactured housing must be permanently installed and meet the HUD Manufactured Housing Construction and Safety Standards and HCFP thermal and site standards. Existing manufactured housing will not be guaranteed unless it is already financed with an HCFP direct or guaranteed loan or it is Real Estate Owned (REO) formerly secured by an HCFP direct or guaranteed loan.

$8,000 Home Buyer Tax Credit

First-time buyers can claim a credit worth $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes.

A big plus is that the credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount. But there has been a lot of confusion over this provision.

100% Financing is Back!

Although the 100% financing/Zero down payment mortgage has gone the way of the dinosaur, this valuable mortgage program is now available once again for designated areas of Arizona.

What kind of loan do you get? How about a 30 year fixed rate where you need not worry about the rate going up during the life of the loan. There are no mortgage insurance and no minimum credit score requirements either. Other benefits include the substitution of "non-traditional" credit when traditional credit is not available. What that basically means if you have no or little credit history, you may be able to submit "alternative" sources of your repayment history such as 12 months of your utility bills payments and rental payments.

And by the way, this program is not limited to first time home buyers, so anyone can apply!

Declining Markets

As a first time home buyer, you may not yet be familiar with the latest mortgage buzz word “declining markets”.

So you may be asking then, what does it mean?

Simply, Fannie Mae (FNMA - Federal National Mortgage Association) and Freddie Mac (FHLMC - Federal Home Loan Mortgage Corporation), have introduced new rules affecting "loan-to-values" (amount financed as a percentage of home value) for home mortgages originated in designated geographic markets.

Fannie Mae and Freddie Mac are US government sponsored public corporations that buy and pool qualified mortgage loans from their originating financial institutions. They then issue securities backed by their guarantee (and not that of the US government) against the mortgage pool for sale in the open market to provide fresh funding for home mortgages. Fannie Mae, as it is popularly called, is the largest US player in the secondary mortgage market, while Freddie Mac is the second largest US player in the secondary mortgage market.

As stated by Fannie Mae:

“Current home price trends indicate that home values continue to decline in many markets across the country. As a result, and based on our continued monitoring of loan performance, Fannie Mae is reinstating a policy to restrict the maximum loan-to-value (LTV) ratio and combined loan-to-value (CLTV) ratio for properties located within a declining market to five percentage points less than the maximum permitted for the selected mortgage product.

The reinstatement of the maximum financing policy and the other changes outlined in this Announcement are necessary in light of current market conditions. These policies are effective for all loans delivered with application dates on or after January 15, 2008.”

How does this affect home buyers in Pinal County?

Let's say that you have applied for a mortgage based on a purchase price of $200,000, with a 5% down payment. Without "declining market", you could borrow $190,000 or 95% (95% Loan-to-Value) of the purchase price.

However, if the home you are buying is deemed to be in a "declining market" by Fannie Mae or if the lender's real estate appraiser determines that it is located in a "declining market", you can now only borrow 90% (instead of the 95% you originally requested), thus requiring that you put an additional "5%" down. In this scenario, you would now be putting a total down payment of 10% (or $20,000) and borrowing $180,00.

This does not necessarily mean that you won't be able to get 100% financing/zero down mortgages anymore. But, it sure is a great incentive for Pinal County first time home buyers to look into Pinal County Down Payment Assistance, as the amount of assistance to eligible home buyers could be up to $20,000!

Interest Rate Trends

Mortgage Rates Rise as Federal Reserve Cuts Short-Term Rates

The average 30 year fixed rate mortgage rose to 6.21% this past week, as the Federal Reserve reduced short-term interest rates for the second time in an eight day period. Nonetheless, mortgage rates are still near a historical low, which may have contributed to a relatively strong refinance market, according to the Mortgage Bankers Association.

In Pinal County, AZ, fourth quarter 2007 home resales (sales of existing homes) picked up which may be attributable in part, to attractive mortgage rates and lower home prices.

As short-term interest rates trend downward, borrowers facing rate adjustments on their ARMS may be getting some relief. Moreover, some homeowners with the now infamous subprime loans may be getting a reprieve via rate freezes and loan modifications as an economic stimulus package is being hammered out.