State of Arizona provides assistance of 22% off Foreclosed Homes

The state of Arizona's Department of Housing will provide Arizona home buyers with 22 percent (22%) of a home's purchase as long as the home being purchased is a foreclosed home. This program is available until November 2010.

Qualifications

This program is not limited to first time home buyers. Anyone can participate. Buyers would need to make a downpayment of at least 3% and attend an eight hour "home buyer education class".

There are upper limits on income based on the number of people in your household. You must also qualify for the loan, so your income shouldn't be too far below the upper limit. For Pima county and the Tucson area, those upper limits are as follows:

size of household	income limit
1	$48,300
2	$55,200
3	$62,100
4	$69,000
5	$74,500
6	$80,050
7	$85,550
8+	$91,100

Loan terms

The assistance comes in the form of a deferred second mortgage with no interest and no monthly payment. In other words, you take advantage of the credit as long as you stay in the house. Selling the house simply means the 22% loan is not forgiven and the end result is you paid market price for the home when you bought. Selling at above your original sale price is the ideal situation which would insure all loans are satisfied and any gains made on the sale is income to you.

Here is how long buyers would need to commit to their properties to have their no-interest loans forgiven:

$15,000 or less, five years.
$15,001 to $40,000, 10 years.
$40,001 or more, 15 years.

Note: In Pima County, the price limit to get assistance on a foreclosure would be $316,250.

Example

Suppose there is a foreclosed home priced at $100,000 and you qualify to buy it based on income. In general terms, you'd put down $3,000, and carry 2 loans, one for $75,660 and one for $21,340. Assuming you qualified for a 5% interest rate the total monthly payment (on the first loan) would be roughly $406 per month, not including real estate taxes. The second loan would have no interest and no monthly payment and would only go into effect IF you decided to sell the property. However, if you sold the property at anything above the $100,000, the proceeds would be enough to pay off the second loan anyway. On the other hand, if you decided to stay in the house for 15 years, the second loan would go away on its own after that time.

To see if you qualify for the Arizona Foreclosure purchase assistance program , Pre-qualify now!