Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant

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Are You Buying a Home in Hard Hit AZ Cities? The Pathway to Purchase Program Offers Down Payment Assistance to Eligible Buyers

Do you plan to buy a home in one of the Arizona cities hit hard by foreclosures in the last decade?

You may be eligible for down payment assistance (DPA).

What is down payment assistance? As explained in a previous blog, down payment assistance is a grant or forgivable loan. Once you qualify for a first loan to buy a house, you receive the down payment assistance to pay the down payment and/or closing costs for the home. It’s free money.

Pathway to Purchase

The Arizona Department of Housing is partnering with the Arizona Home Foreclosure Prevention Funding Corporation to provide the Pathway to Purchase program (P2P). Pathway to Purchase helps homebuyers in Arizona cities hit the hardest by the foreclosure bust to come up with a down payment.

Borrowers apply for a first loan through the Pathway program. This is a 30-year fixed-interest rate loan. Once you apply for the first loan, you receive a second loan to cover the down payment and closing costs up to 10% of the purchase price with a max of $20,000. If the purchase price is $200,000, for example, then the second loan is $20,000. If the purchase price is $250,000, the second loan is still $20,000. This second loan is forgivable—it has no payments and no interest, and after five years, it goes away.

This program is available only in these 17 Arizona cities:

Arizona City Avondale Buckeye Case Grande
Coolidge Douglas El Mirage Fort Mohave
Goodyear Huachuca City Laveen Maricopa
Red Rock Sierra Vista Snowflake Tucson


Program Requirements

There are a few requirements, of course. Borrowers can’t own another residential property at the time of close, including inherited and manufactured homes. The annual income of all borrowers can’t be more than $92,984. The purchase price can’t be more than $371,936. And the credit score of all borrowers must be 640 or greater.

In addition, the loan must be for the purchase of an owner-occupied, primary residence, and the borrowers must move in within 60 days of close. The property can be a single-family home, townhome, or condo. The loan cannot be used for a refinance or new construction loan or for manufactured or mobile homes, and borrowers cannot receive cash back after the loan closes. Co-signers are not allowed.

The Pathway program requires a DTI of 45%. DTI is debt-to-income ratio—the borrowers’ total monthly debts divided by their gross monthly income. If you have a $1,000 mortgage payment, $200 in credit card payments, and a $300 car payment, for example, and a $4,000 gross monthly income, your DTI is $1,000 + $200 + $300 / $4,000 = 37.5%.

To participate in the program, you must take a HUD-approved homebuyer education class. Generally, you can take the class online, in person, or by phone.

Note that the lender’s requirements may trump some of the program requirements based on whatever loan the buyer qualifies for.

What Next?

Only ADOH-approved lenders can offer Pathway to Purchase. The good news is, Caliber Home Loans is an approved lender. Give us a call if you’re buying a house in one of the cities listed above. We’ll walk you through the process, get you money for your down payment, and put you in your dream home before you know it.