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“Your Way Home Arizona” – This Program May Be the Perfect Solution for Homebuyers Looking to Mortgage a Foreclosure Home in Phoenix, AZ

By
Mortgage and Lending with Reasy Financial LLC NMLS 2446155

Foreclosure Home SalesThe Phoenix area housing market is still being driven by foreclosed homes.  This wave of inventory consisting of bank-owned properties is not likely to decrease any time in the near future.  Now, Arizona residents have an even greater opportunity to take advantage of the affordable home prices and the foreclosure market.  The "Your Way Home Arizona" program was created by the Arizona Department of Housing (ADOH) to help homebuyers purchase foreclosed properties in Arizona.  The ADOH has designated $20 million from HUD's Neighborhood Stabilization Program to fund this program. 

The Your Way Home AZ program offers a forgivable, zero-percent-interest loan of 22% of the home's purchase price to qualified borrowers purchasing an eligible foreclosed home.  This significantly increases Arizona residents' purchasing power, since eligible borrowers only need to qualify for 75% of the purchase price.  The program is currently available throughout Arizona, including Maricopa and Pima counties that were recently added in July 2009.

The following are some of the program specifics and guidelines:

Borrower Qualifications:

  • The purchased property must be a primary residence
  • The household gross income cannot exceed 120% of the average median income for the county.  Household income for qualification purposes includes the gross income of all persons 18 years and older living in the residence.
  • Not required to be a first-time homebuyer
  • Must attend an approved Homebuyer Education Class
  • Must have two months reserves of PITI
  • Down payment requirement is 3% of purchase price.  1% must be provided by the borrower, but 2% can be gifted funds or from other approved sources.

Property Requirements:

  • Foreclosed/Bank-Owned properties only.  The property must be vacant at the time of listing.
  • Eligible for any one-unit single-family residence, including condominiums, townhomes and permanently installed mobile homes
  • Purchase price must be at least 1% less than the appraised market value of the property
  • Properties must pass a Minimum Property Standards inspection prior to closing

Financing Terms:

  • First mortgage must be a fixed rate fully amortized loan not to exceed 30 years
  • The maximum loan amount of the first mortgage cannot exceed 75% of the purchase price
  • The first mortgage can be either FHA, VA, USDA or conventional financing
  • The ADOH provides a silent-second loan for 22% of the purchase price that has no interest or required payments
  • The program loan term is between 5-15 years depending on the loan amount

Under $15,000:                5 years

$15,000 - $40,000:          10 years

Over $40,000:                  15 years

  • The program loan is forgiven at the end of the loan term provided the borrower continues to own and occupy the home until such time.  (Loan must be repaid if property is sold during the loan term)
  • First mortgage can be refinanced provided the new loan results in a lower monthly housing payment
  • Seller's may contribute up to 6% in closing costs and pre-paid expenses

Don't delay, as funds for this program are required by federal regulations to be committed by approximately September 2010 or they will be returned to the government.   

Before you begin your search for a home in Phoenix or surrounding areas, you should contact the Krushinsky Team at 602-695-7575 or david@dkhomeloans.com to find out if you are eligible to qualify for this incentive.     

Posted by

About the Author

My name is David Krushinsky and I am a Phoenix mortgage specialist that is truly passionate about my profession and the result is that nearly 100% of my business is by referral from satisfied clients, trusted financial advisors and the most experienced REALTOR®'s in the Phoenix area.
Questions? Call 480.339.1576 or Visit My Website

Anonymous
Tamara

if you only put the 3% down do you then get hit with PMI???

Aug 26, 2010 01:37 PM
#1
David Krushinsky
Reasy Financial LLC - Peoria, AZ
AZ MB-1044208 MLO NMLS #202115

Tamara - you would not have to pay PMI if you financed the home with a conventional loan.  If the home were financed with an FHA loan, it would still require the upfront & monthly mortgage insurance.

Aug 27, 2010 05:52 AM
Anonymous
Drew
David, My wife purchased a home under this program about 3 yrs back before we were married (through AmeriFirst Financial) and we were under the impression we could not refinance the 1st Mort. (75%LTV) without having to repay the silent second. Your comments above state that you can refi it if you lower your payment, which is correct? We would love to refi into the current low rates in AZ and hopefully get rid of the monthly MIP if possible because I'm sure our home value has increased greatly over the last 3years. Please let me know if this is possible and how? Thanks.
Apr 15, 2013 11:18 AM
#3
David Krushinsky
Reasy Financial LLC - Peoria, AZ
AZ MB-1044208 MLO NMLS #202115

You have to get permission from the agency who funded the silent second.  Contact them and they will advise you if you're permitted to refinance.  Typically you will be allowed.

Apr 18, 2013 04:05 AM