If you live in Maricopa County and are a low or moderate-income family, you may qualify for the Maricopa County Home in Five Advantage Program.
Even though the name is called ‘Home in Five’ the program actually provides you with up to 7% assistance to help you with your down payment or closing costs on a home. Keep reading to learn how the program works.
What is the Home in Five Advantage Program?
The Phoenix and Maricopa County IDES run the Home in Five Advantage Program. They created it in an effort to rebuild areas affected by foreclosures. The program helps to rebuild areas by making homeownership possible for low to moderate income borrowers.
Qualifying for the Home in Five Advantage Program
Just how do you qualify for the Home in Five Advantage Program? The following qualifications are required:
- You need at least a credit score of 640
- You must have a maximum total debt ratio of 45% (this includes all debts including housing)
- You must live in the property as your primary residence (you have up to 60 days after closing)
- You must attend homebuyer counseling
- You must not make more than $99,169 per year
The Eligible Properties
In order to qualify for the program, you must purchase an eligible property in Maricopa County. The eligible properties include:
- New homes in Maricopa County
- Existing homes in Maricopa County
- Single-family, condominium, or townhomes in Maricopa County
You don’t have to worry about a purchase price maximum as there isn’t one for this program. You just have to find an eligible property within the county and live in it as your primary residence.
Certain borrowers may receive up to an additional 1% in assistance. These individuals are those that serve the community including:
- Teachers teaching grades K-12
- First responders
- Military veterans
- Current military personnel
- Individuals that make up to $34,550 per year
How it Works
The down payment assistance is in the form of a 2nd mortgage. You’ll receive a 3-year second mortgage with a 0% interest rate. The amount you receive depends on your qualifications and the amount that you need, but it’s typically between 3% and 5% of the purchase price.
The second mortgage gets ‘forgiven’ over a period of three years. It’s only forgiven in you meet the qualifications of living in the home full-time, though. The only way you would have to pay off any of the loan is if you pay off your first mortgage within three years of moving into the home. If you keep the first mortgage for at least 3 years, 100% of the second mortgage is forgiven. This means you don’t pay it back. If you do move out of the home or refinance the first mortgage within the first three years, you will have to pay the 2nd mortgage balance in full.
The funds from the second mortgage can cover 100% of the necessary funds to put down on a loan and/or pay the closing costs. But, as the borrower, you cannot receive any cash in hand. The only money you can receive is funds that reimburse you for any earnest money, taxes, interest, or prepaid funds that you paid out of your own funds.
The Maricopa County Home in Five Advantage Program makes it easier for you to become a homeowner. It also helps revitalize areas of Arizona that may have been hit hard by foreclosures. It’s a win-win for borrowers and the community, giving everyone a positive place to live.