Forgivable grant
The assistance is structured as a "soft second" loan. If you stay in the home long enough (often 3, 5, or 7 years), it's forgiven: you owe nothing back.
Tradeoff: usually a higher first-mortgage rate to fund the forgiven assistance.
Topic guide
Arizona down payment assistance — the 7+ programs that help first-time buyers.
Arizona has more down payment assistance programs than most states. Local AZ grants, county-specific options, and national programs that work statewide. Some are forgiven over time, some are repaid when you sell. The right one depends on your income, your zip code, and how long you'll stay in the home.
Quick answer first
- What it is: A grant or second loan that helps cover your down payment, closing costs, or both.
- How much: Typically 3–6% of the loan amount, sometimes more in local AZ programs (Flagstaff CHAP up to $50,000).
- Who qualifies: First-time buyers and many repeat buyers, depending on the program. Income limits vary; FICO floors typically 600–620.
- What you give up: Usually a slightly higher first-mortgage rate to fund the assistance. The tradeoff math is honest, not always one-sided.
For the deep dive, program-by-program guidelines, real numbers, and an honest "when DPA isn't the right call" page, we built a sister site dedicated entirely to this topic:
Visit DownPaymentAssistanceArizona.com →The 7+ programs at a glance
Arizona-specific programs (local AZ funding)
| Program | Where it works | Typical assistance |
|---|---|---|
| Home Plus | Statewide AZ (some county exclusions) | Up to 5% of loan amount |
| Arizona Is Home | Statewide AZ (excl. Chino Valley) | Up to 5% of loan amount |
| Home In 5 | Maricopa County only | up to 6.5% of loan amount |
| Flagstaff CHAP | City of Flagstaff only | Up to $50,000 (10:1 match) |
National programs that work in Arizona
| Program | Forms available | FICO floor |
|---|---|---|
| Chenoa Fund | Forgivable + Repayable (FHA-focused) | 600 |
| Arrive Home | Forgivable + Repayable (3.5% or 5%) | 600 |
| Essex / NHF | Amortized + 3-year Forgivable | 600 |
Numbers are typical ranges across program guidelines as of 2025–2026. DPA program details change at least annually, verify current details with us before relying on any specific number.
The three forms DPA takes
Most Arizona DPA falls into one of these three structures. Knowing the difference matters for total cost over the life of the loan.
Repayable second mortgage
The assistance is a real second loan you pay back monthly. Term is usually 10 years, rate slightly above the first mortgage.
Tradeoff: cheaper rate on the first, but more total payments.
Deferred / due on sale
No monthly payments. The assistance sits as a silent second and is repaid only when you sell, refinance for cash-out, or stop occupying the home.
Tradeoff: better cash flow, but you eventually owe the full balance.
The honest tradeoff
DPA isn't free money, that's the part most websites won't tell you. The assistance is funded by raising the rate on your first mortgage slightly. That rate premium is what pays for the "free" down payment.
- Forgivable grants usually carry a higher First-mortgage rate (often 0.5–1% above market).
- Repayable seconds typically keep the first-mortgage rate closer to market, but you carry a second monthly payment.
- Deferred seconds sit silent until trigger events (sale, cash-out refinance, no longer primary residence).
In some cases, high credit, decent savings, plan to hold long-term, taking a lower-rate FHA or conventional without DPA actually saves you more over the life of the loan. We'll model both paths against your real numbers and tell you the honest answer.
Stack DPA with FHA, VA, USDA, or Conventional
Most Arizona DPA programs work with FHA first mortgages, the most common pairing for first-time buyers. Some programs also work with:
- Conventional. Home Plus, Arizona Is Home, and others have conventional options. Better long-term cost if your credit is strong.
- VA, most veterans don't need DPA (0% down already), but Arizona DPA can cover closing costs on VA loans.
- USDA, fewer DPA programs work with USDA, but some do for closing-cost assistance.
The combo of FHA + Arizona DPA is the most common path to near-$0 out-of-pocket for first-time AZ buyers. Mike has closed dozens of these scenarios.
Who DPA works best for
- First-time buyers with limited savings: The program is literally built for this
- Phoenix metro buyers: Home In 5 specifically targets Maricopa County, with strong assistance amounts
- Flagstaff buyers: Flagstaff CHAP is unusually generous (up to $50K with a 10:1 match)
- Buyers planning to stay 5–7+ years: Long enough to hit forgiveness windows on most programs
- Income-qualified households: Local AZ programs cap at up to $157,360 (Home In 5) / up to $155,386 (Home Plus) depending on program/county
Who should skip DPA
- Buyers with 740+ FICO and 5%+ saved: You'll usually get a better long-term rate without DPA
- Buyers planning to refinance or sell within 1–2 years: The rate premium hasn't paid for itself yet
- High-income buyers above program income limits: You may not qualify anyway
- Investment property buyers: DPA is for primary residences only
Want the deep dive?
Our full Arizona DPA resource has program-by-program guidelines, real-numbers comparisons, and an honest "when DPA isn't the best option" page. Built specifically for AZ buyers researching this.
FAQ
Common DPA questions
What is down payment assistance?
A grant or second loan that helps cover your down payment, closing costs, or both. Delivered through a state, city, county, or non-profit program working with a participating lender (Cornerstone, in this case). Arizona has 7+ DPA programs.
Do I have to be a first-time buyer?
For some programs yes (Flagstaff CHAP, parts of Home Plus). For others no (Home In 5 allows repeat buyers; Chenoa, Arrive, and Essex have no FTHB requirement). HUD's definition of "first-time homebuyer" just means you haven't owned a primary residence in the last 3 years.
What credit score do I need?
Most national programs accept FICO 600+ on FHA loans. Arizona-specific programs typically require 620+. Lower scores usually mean tighter DTI requirements.
Will I owe the assistance back?
Depends on the program structure. Forgivable grants are written off after 3, 5, or 7 years of continued occupancy. Repayable seconds you pay monthly. Deferred ("silent second") are repaid only when you sell, refinance for cash-out, or stop using the home as your primary residence.
Are there income limits?
Local Arizona programs typically have income limits. Home In 5 caps at up to $157,360, Flagstaff CHAP at ~150% AMI. National programs (Chenoa, Arrive, Essex) usually have no income limit, though pricing tiers may apply at higher incomes.
Is DPA always the right move?
No. DPA programs typically carry a slightly higher first-mortgage rate to fund the assistance. If you have most of your down payment saved already and strong credit, taking a lower-rate FHA or conventional without DPA may save you more over the life of the loan.
Do I have to take a homebuyer education course?
Yes for most DPA programs. The course takes 4–6 hours, is usually online, and is often free. We'll point you at the specific HUD-approved course that satisfies your chosen program.
Curious if DPA fits your situation?
20-minute call. We'll model 2–3 programs against your real numbers and tell you the best path, including whether DPA is even the right call for you.