As if the opportunities for home buyers weren’t sweet enough, Arizona has just sweetened the pot big time. Want to know how?
First, a little background.
There was a real estate boom in Arizona awhile back that featured frenzied demand, shrinking inventories, and soaring prices. Then there was a bust that included vanishing demand, bloating inventories, and falling prices. An unfortunate byproduct of this cycle was the dreaded foreclosure.
Buyers started to turn out in our neck of the woods late last year, mostly for those foreclosures. Inventories started to shrink, and prices started to stabilize in some segments of the market. Even foreclosure inventories started dropping, but they have not gone away altogether.
It seems that the Arizona Department of Housing really wants to see all those foreclosures sold ASAP. So much so that are willing pick up 22% of the purchase price for qualified buyers of foreclosed homes. Enter “Your Way Home AZ“, a program funded by HUD’s Neighborhood Stabilization Program:
Because access to homeownership is fundamental to Arizona’s way of life, Your Way Home AZ is a financing tool that will make it easier for eligible, credit-worthy homebuyers to obtain mortgages.
Funding is made available through the U.S. Housing and Urban Development Neighborhood Stabilization Program (NSP). The state of Arizona and nine other counties and communities received more than $121 million to help stabilize our hardest hit neighborhoods through a variety of efforts.
This program, which is now available in Mohave County (including Bullhead City, Fort Mohave, and Mohave Valley), actually provides purchase assistance through a “forgivable”, zero-interest, no-payment loan. Forgivable means the loan simply goes away after a certain period of time . Just how long depends on the amount:
- 5 years for assistance of $15,000 or less
- 10 years for assistance of $15,001 – $40,000
- 15 years for assistance of more than $40,000
Keep in mind these terms are specific to the Arizona Department of Housing program in Mohave County, which may be different that those programs offered throughout the state by various partners.
I want to emphasize that, yes, this is a loan. But it’s a second loan with no payments, so it is not factored into qualifying for the purchase. Say you have a purchase price of $100,000 with 3.5% down payment ($3,500). Your first loan would be $74,5000 ($100,000 minus $22,000 second, minus $3,500 down payment). Your payments would be based on that $74,500.
There is no payment and no interest on the $22,000 second. Should you own the home for 10 years, the second loan is forgiven. If you sell the home sooner, you will owe the $22,000, but with no interest.
This program makes it easier for people to qualify and afford a home, while at the same time encouraging the sale of foreclosures thereby putting those homes back in the hands of humans who will occupy the home instead of leaving them vacant while they sit on the books of banks across the country.
Qualified first-time buyers can also still receive their federal tax credit of up to $8,000!
There are income restrictions and other requirements that must be met, including attending an mandatory 8 hour class. For complete details please visit the website or talk to your lender to see if they are approved for this program.
Of course I’d me more than happy to help you! Give me a call or drop me an email anytime.
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It’s no wonder I can’t sell my home which is paid for in full. Just another example of people who worked hard and sacrificied to pay for their homes get the short end. I have had my home on the market for over a year, it is priced competatively with these forclosures but they won’t even look at it. The State of Arizona is helping the morgage companies that got us into this mess and screw the tax payer that paid for their home. Also what about people that need to sell their homes because of job loss and other reasons beyond their control, some of them may be forced into forclosure because of this. I need to sell my home because of health issues, where is my help?
This is in reference to the 22% homebuyers program.It’s no wonder I can’t sell my home which is paid for in full. Just another example of people who worked hard and sacrificied to pay for their homes get the short end. I have had my home on the market for over a year, it is priced competatively with these forclosures but they won’t even look at it. The State of Arizona is helping the morgage companies that got us into this mess and screw the tax payer that paid for their home. Also what about people that need to sell their homes because of job loss and other reasons beyond their control, some of them may be forced into forclosure because of this. I need to sell my home because of health issues, where is my help?
I totally understand where you’re coming from. The fact that this program focuses on foreclosures sure makes it feel like a bank bailout. On top of that, it just might take a buyer for your house and redirect them to a foreclosure.
I’d like to think the big picture idea is to help move the foreclosures through the system and provide relief for the whole market. Regardless of the intentions, the fact is that getting the foreclosures out of the way would do just that.
As far as your house not selling, if it is competitively priced with those foreclosures then there might be something else at play. Half of the homes sold this year were not foreclosures, so we know people are buying non-bank owned homes, too.
If your house is getting proper marketing exposure, is in good showing condition, and it’s priced right you should be getting showings and offers. I would suggest you review these things with your agent right away to make sure your house is positioned to sell.
Thanks for your comments!