Who Is Considered a First-Time Homebuyer in Mississippi?

A person who has never owned a home, or who hasn’t owned one in the last three years, qualifies. The U.S. Department of Housing and Urban Development (HUD) also considers the following people first-time homebuyers:

•   A single parent who has only owned a home with a partner while married

•   A displaced homemaker who has only owned a home with a spouse

•   Someone who has owned a principal residence not permanently affixed to a permanent foundation

•   Someone who has only owned a property that wasn’t in compliance with state, local, or model building codes

Recommended: First-Time Homebuyer Guide

3 Mississippi Programs for First-Time Homebuyers

Here are a few of the programs available to the first-time homebuyer in Mississippi. You’ll find some low-interest mortgage loans and down payment assistance options that you may qualify for.

1. MHC: Smart6

A 30-year fixed rate mortgage combined with a $6,000 (and 0% interest) second loan that you can use for your down payment or closing costs is offered through Smart6. Qualifying income and credit score numbers are set by lenders (though in most cases the buyer’s income cannot exceed $132,770) and the purchase price limit on the home is $398,310. The $6,000 second loan is due when the home is sold, the first loan is repaid, or the first loan matures. A similar program, Easy8, comes with an $8,000 second mortgage.

2. MHC: Trusty10

A 30-year fixed rate first mortgage combined with a $6,000, 15-year second mortgage with a 2.00% interest rate. The funds can be used for down payment or closing cost assistance. There are county-specific income guidelines and lender-determined credit score requirements for this second loan.

3. MHC: Housing Assistance for Teachers

If you’re a teacher working in an area where there is a shortage of educators in Mississippi, you may qualify for a special down payment loan. This program provides a 25- or 30-year fixed loan of up to $6,000.

To qualify, you must agree to serve as a teacher for three years in the designated district. And in this case, your loan can be forgiven. Also, you must provide at least 1% of the home’s sale price and one month’s reserves.

How to Apply to Mississippi Programs for First-Time Homebuyers

If you qualify for any of the programs for the first-time homebuyer in Mississippi, contact a participating lender to start your application process. Also, you can use this mortgage calculator to see how much your monthly payments might be.

Recommended: Understanding Mortgage Basics

Federal Programs for First-Time Homebuyers

Several federal government programs are designed for people who have low credit scores or limited cash for a down payment. Although most of these programs are available to repeat homeowners, like state programs, they can be especially helpful to people who are buying a first home or who haven’t owned a home in several years.

The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

Federal Housing Administration (FHA) Loans

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders that participate in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO^® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). FHA loans allow a DTI ratio of up to 57% in some cases, vs. a typical 45% maximum for a conventional loan.

Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

FHA loans always require mortgage insurance: a 1.75% upfront fee and annual premiums for the life of the loan, unless you make a down payment of at least 10%, which allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137. You can learn more about these loans, including FHA loans for refinance and rehab of properties, by reading up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

Very low- and low-income borrowers may make a 3% down payment on a Home Possible^®mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

The Home Possible mortgage is for buyers who have a credit score of at least 660.

Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

Fannie Mae HomeReady Mortgages

Fannie Mae HomeReady^® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site .

Fannie Mae Standard 97 LTV Loan

The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

Unlike an FHA loan, the 97 LTV loan has no upfront mortgage insurance fee and does have cancellable mortgage insurance. The loan is for just one-unit single-family homes, co-ops, condos, and planned unit developments.

Department of Veterans Affairs (VA) Loans

Eligible active-duty members of the military, veterans, reservists, and surviving spouses may apply for loans backed by the Department of Veterans Affairs. If you think you might qualify, take time to learn what a VA loan is: It can be used to buy, build, or improve a home and has a lower interest rate than most other mortgages. It also doesn’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

Another benefit of VA loans is that they do not require private mortgage insurance (PMI) for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

Native American Veteran Direct Loans (NADLs)

Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee. For more information, contact [email protected].

US Department of Agriculture (USDA) Loans

No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, head to this USDA site .

HUD Good Neighbor Next Door Program

This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years. Contact the Mississippi HUD office.

Mississippi Homebuyer Stats for 2025

•   Percentage of buyers nationwide who are first-time buyers: 24%

•   Median age of first-time homebuyers: 38

•   Median home price in Mississippi: $267,000

•   Median down payment for first-time homebuyer: 9%

•   Average credit score in Mississippi: 680

Not sure how much home you can afford? Use this home affordability calculator to find out.

Additional Financing Tips for First-Time Homebuyers

In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. After reading up on how to choose a mortgage term, check out these tips on how to lower your mortgage payment:

•  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. The IRS considers anyone who has not owned a primary residence in the past two years a first-time homebuyer. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

•  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

•  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000 in a 12-month period, without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

•  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

•  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees. Mississippi is among a dwindling number of states that still offers the credit; consult a tax advisor as tax policies change regularly.

•  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

•  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

The Takeaway

Homes in Mississippi are selling fast, but if you’re a first-time buyer in the state, you may be able to take advantage of programs that can offer you a low-interest mortgage and assistance with down payment and closing costs.

Who Is Considered a First-Time Homebuyer in Arkansas?

Here’s something you should know as you start your search for a home loan: For most programs in Arkansas, there is no first-time buyer requirement. For those that do have a requirement, applicants are considered first-time homebuyers if they haven’t owned a home for at least the past three years. (Veterans, veterans’ spouses, and those buying in targeted areas also may qualify for this program.)

Before you start the application process, whether assistance is offered by a state or city, it’s a good idea to be clear on the specific eligibility standards.

Recommended: Understanding Mortgage Basics

Other Arkansas Homebuyer Programs by Location

If you’ve already chosen the part of Arkansas you hope to make your home, you also may want to research local buyer assistance programs. (And if you aren’t sure where to put down roots, check out a guide to the best affordable places in Arkansas to live.)

Check back occasionally for new offers. Some first-time homebuyer programs base their opportunities (and deadlines) on the funds they expect to become available. When their money runs out, they may press pause.

Some local programs include:

Crawford-Sebastian Community Development Council Programs

The Crawford-Sebastian Community Development Council’s Homeownership and Asset Development Center provides homebuyer counseling and education programs as well as down payment assistance in the form of grants and forgivable loans. For information on the benefits and requirements of various programs, you can check out the Homeownership Program page, email [email protected], or call 479-785-2303.

City of Jonesboro Homeownership Assistance Program

Jonesboro’s Homeownership Assistance Program was created to help low- and moderate-income homebuyers who wish to purchase a property in the city. The program offers qualifying first-time homebuyers a grant that can be used for their down payment and closing costs. For information, you can go to the Homeownership Assistance Program page, email [email protected], or call 870-336-7170.

City of Little Rock Down Payment Assistance Program

Little Rock’s down payment assistance program offers up to $5,000 to qualifying low- and moderate-income first-time homebuyers through a forgivable second loan. For information, check out the program brochure or ask your Arkansas lender about applying.

City of Pine Bluff Homebuyer Assistance Program

Pine Bluff’s Economic and Community Development Department offers this program, which was created to help low- and moderate-income buyers. Qualified applicants may receive assistance of $2,000 for a down payment and up to $3,000 of eligible closing costs. For requirements and approved lenders, check out the program’s brochure .

How to Apply to Arkansas Programs for First-Time Homebuyers

Follow the links under each program to find participating lenders or other contacts.

Federal Programs for First-Time Homebuyers

Several federal government programs are available for people with low credit scores or limited funds for a down payment. They are sometimes for repeat homeowners, but these national programs are generally created for people who are buying a first home or who haven’t owned a home in several years.

The mortgages tend to be for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

Federal Housing Administration (FHA) Loans

The FHA, which is part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from an approved-lenders list of institutions participating in the FHA loan program. Loans have competitive interest rates and require a down payment of 3.5% of the purchase price for borrowers, who typically need FICO® credit scores of 580 or higher. Those with scores as low as 500 must put at least 10% down.

Limits for FHA loans in 2025 range from $524,225 for single units to $1,008,300 for four-unit properties. Higher-cost areas tend to have higher limits.

In addition to examining your credit score, lenders will look at your debt-to-income ratio (DTI, your monthly debt payments compared with your monthly gross income). A DTI of up to 57% is allowed for FHA loans, vs. a typical 45% maximum for a conventional loan.

Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

FHA loans without exception require mortgage insurance premiums (MIP): This includes a fee of 1.75% of the base loan amount, usually rolled into the loan, upfront. Borrowers must carry annual premiums for the life of the loan. As of 2025, new homebuyer monthly MIP is 0.15% to 0.75%. With a down payment of at least 10%, the removal of mortgage insurance is possible after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be around $137.

To learn more about options, including FHA loans for refinancing and rehabbing properties, read about FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

Low- and very low-income borrowers may make an affordable 3% down payment on a Home Possible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

The Home Possible mortgage is for buyers who have a credit score of 660 or higher. Once you pay off 20% of the loan, the Home Possible mortgage insurance becomes unnecessary, which will lower your mortgage payments.

Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

Fannie Mae HomeReady Mortgages

Fannie Mae HomeReady^® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site.

Fannie Mae Standard 97 LTV Loan

The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

Department of Veterans Affairs (VA) Loans

Active members of the military, veterans, reservists, and surviving spouses who are eligible may apply for loans backed by the Department of Veterans Affairs. These loans designed for those who serve our country can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

Another VA loan advantage is that they do not require PMI for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

Native American Veteran Direct Loans (NADLs)

Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. Unlike VA loans listed above, the Department of Veterans Affairs is the mortgage lender on NADLs. The VA requires no mortgage insurance, but it does charge a funding fee.

US Department of Agriculture (USDA) Loans

No down payment is required on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

The USDA also directly issues loans to low- and very low-income people. For loan basics and income and property eligibility, check out this USDA website.

HUD Good Neighbor Next Door Program

This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

Visit the HUD program page.

First-Time Homebuyer Stats for 2025

Here are some stats on homebuyers and the homebuying process.

•  Percentage of buyers nationwide who are first-time buyers: 24%

•  Median age of first-time homebuyers: 38

•  Median down payment for first-time homebuyer: 9%

•  Median home price in Arkansas: $266,500

•  Median down payment: $26,232

•  Average rent in Arkansas: $1,400

•  Average credit score in Arkansas: 695

Additional Financing Tips for First-Time Homebuyers

In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you become a homeowner. Some examples:

•  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. For the purposes of IRA withdrawals, a first-time homebuyer is someone who has not owned a principal residence in the last two years. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

•  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

•  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you may be able to borrow as much as 50% of your 401(k) balance, up to $50,000, within a 12-month period and incur no taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

•  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

•  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. Any additional interest paid can still be used as an itemized deduction. To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

•  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

•  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

The Takeaway

Low- and moderate-income first-time homebuyers in Arkansas may be able to pair a mortgage with down payment assistance. Other first-time buyers can shop for a mortgage on their own that’s a good fit.

By Kim Franke-Folstad

(Last Updated – 06/2025)

First-time homebuyers in Arizona are facing many of the same challenges as buyers across the rest of the country — including high costs. But perhaps they are feeling the pinch even more. The median selling price of an Arizona home hit $440,600 in June 2025, down just 3.1% year over year in the year’s first quarter, after rising consistently during the second half of 2025, Redfin reported. In some popular Arizona communities, the numbers soar higher still. For example, in Scottsdale, the home sale price median is currently $861,520.

The median home sale price in the U.S. is $438,357, according to Redfin data, just below the Arizona median.

Wherever they are coming from, first-time homebuyers may feel as if the keys to their first homes are dangling further out of reach, but fortunately, they may be able to get financial help through programs offered by the state and some counties. Some longstanding federal programs could also improve a buyer’s chances of success. These programs can help prospective homebuyers save on their down payment, mortgage, and closing costs.

Who Is Considered a First-Time Homebuyer in Arizona?

For a number of Arizona’s home mortgage loan programs, you’re considered a first-time buyer if you haven’t owned a home in the last three years. It’s a good idea, though, to be clear on each program’s specific eligibility standards before you start the application process.

It’s a good idea, though, to be clear on each program’s specific eligibility standards before you start the application process.

💡 Quick Tip: Thinking of using a mortgage broker? That person will try to help you save money by finding the best loan offers you are eligible for. But if you deal directly with an online mortgage lender, you won’t have to pay a mortgage broker’s commission, which is usually based on the mortgage amount.

5 Arizona Programs for First-Time Homebuyers

Most first-time homebuyer programs in Arizona are designed to help low- to moderate-income buyers working to come up with a down payment and/or closing costs when they purchase a house. Generally, that assistance comes in the form of a second mortgage that is fully forgiven if the buyer stays in the home for a set amount of time (usually three years).

During that time, buyers don’t have to make a monthly payment or pay interest on the second loan. But if they sell the home before the full three years is up, they will be required to repay a portion of the assistance they received.

Participants must meet limits regarding their income, credit scores, and debt-to-income ratio. Typically, the home must be the buyer’s primary residence, and there may be limits on how much the home can cost. Also, at least one of the buyers may be required to complete a homebuyer education course.

Read on for details about Arizona’s homebuyer programs.

1. Home+Plus Down Payment Assistance Program

The Arizona Industrial Development Authority’s Home+Plus Home Buyer Down Payment Assistance
Program offers qualifying buyers a 30-year fixed-rate mortgage paired with up to 4% down payment assistance (DPA) to use toward the down payment and/or closing costs.

Depending on your eligibility and the home you plan to buy, you may have the option of choosing from different types of mortgages, including an FHA, VA, USDA, Fannie Mae, or Freddie Mac home loan.

Availability: Statewide

Assistance Amount: Up to 5% of the home’s purchase price

Type of Assistance: Second mortgage, fully forgiven after five years in the home

Benefits and Qualifications Include:

•   Annual income can’t be more than $146,503

•   All borrowers must have a minimum credit score of 620

•   Maximum DTI ratio allowed is 45% (50% in some cases)

•   Mortgage insurance is required if the first mortgage is a Fannie Mae or Freddie Mac loan and the down payment is under 20%, but the cost may be lower than for coverage outside the Home+Plus program

•   You don’t have to be a first-time homebuyer to qualify

•   At least one borrower must complete a homebuyer education course before the loan closes

To Apply: If you’re interested in Home+Plus assistance, a good first step may be to find a participating lender that is familiar with the program and can take you through the process.

2. Home in Five Advantage and Home In Five Platinum programs

Home in Five Advantage and Home in Five Platinum are offered to low- to moderate-income homebuyers in Arizona’s Maricopa County. Qualified borrowers can receive assistance with their down payment and closing costs, as well as a loan with a competitive interest rate.

Eligible K-12 teachers, first responders, military personnel and veterans, and individuals who earn up to $49,500 annually may receive an additional 1% in assistance.

Availability: Maricopa County, city of Phoenix

Assistance Amount: Up to 6% of the home’s purchase price

Type of Assistance: Second mortgage, fully forgiven after three years in the home

Benefits and Qualifications Include:

•   Annual income can’t be more than $141,820

•   All borrowers must have a credit score of 640 or above (680 for some loan types)

•   Maximum DTI ratio allowed is 50%

•   No maximum purchase price

•   At least one borrower must complete a homebuyer education course

•   Buyers must occupy the purchased home as their principal residence within 60 days of closing

•   Must be a new or existing single-family home, condominium, or townhome

Homebuyers in designated low-income neighborhoods may receive an additional 0.5% in assistance through the Home in Five Advantage BOOST program. Your lender can help you check your eligibility for this extra support.

To Apply: A trained loan officer with an approved lender can help you get started.

3. Pima Tucson Homebuyer’s Solution Program

The Pima Tucson Homebuyer’s Solution Program (PTHS) is provided by the Industrial Development Authority of the county of Pima and the City of Tucson. The program offers qualified homebuyers multiple first 30-year fixed mortgage options (including FHA, VA, USDA, Freddie Mac, and Fannie Mae loans) along with a forgivable second mortgage that can be used for a down payment (typically 2% to 5%) and closing costs.

Availability: Pima County and city of Tucson

Assistance Amount: Available at multiple levels

Type of Assistance: Assisted and unassisted rate mortgages and second mortgage, fully forgiven after three or 30 years

Benefits and Qualifications Include:

•   There is neither a first-time homebuyer nor purchase price qualification

•   Typical income cap is $126,351

•   Minimum credit score of 640 and maximum DTI of 45%

•   Buyers must occupy the property as their principal residence

•   Borrowers must complete a homebuyer education course

To Apply: Contact an approved lender.

4. Tucson Pima County HOME Down Payment Assistance Program

Qualified homebuyers in Tucson and Pima County can receive down payment assistance through the Community Investment Corporation’s HOME Down Payment Assistance Program Assistance is based on family size and household income.

Availability: Pima County and City of Tucson

Assistance Amount: Up to 20% of purchase price

Type of Assistance: Second mortgage; forgiveness depends on loan amount and duration

Benefits and Qualifications Include:

•   Maximum income of $101,550, depending on family size

•   Maximum DTI of 45%

•   Maximum purchase prices of $333,925 for existing homes; $389,491 for new properties

•   No cash assets over $10,000 and homebuyer must contribute at least $1,000 of their own funds to the purchase and have the equivalent of two months’ worth of mortgage payments on reserve in the bank

•   Buyers must occupy the property as their principal residence during the affordability period

•   Borrowers must complete a homebuyer education course

•   Inspection of property typically required

To Apply: Contact one of these approved counseling agencies for more information and assistance:

•   Administration of Resource and Choices

•   Chicanos Por La Causa

•   Family Housing Resources

•   Pima County Community Land Trust

•   Pio Decimo Center

•   Primavera Foundation

5. Mortgage Credit Certificate Program

Borrowers can use a mortgage credit certificate (MCC) to claim a portion of their annual mortgage interest, dollar for dollar, up to $2,000, as a federal tax credit every year for the life of their loan.

Applicants must be first-time homebuyers (you can’t have owned a home within the past three years) unless you’re a qualified military veteran or buying in a designated area. The nonprofit Community Investment Corporation administers the MCC program; income and purchase price limitations may vary by county.

To Apply: You can apply for the credit certificate when you take out a home loan through a state-approved participating lender. You can schedule an appointment with Arizona’s Community Investment Corporation (CIC) to learn more. The organization is not always accepting applications, so check back.

Federal Programs for First-Time Homebuyers

A number of federal government programs exist for people with low credit scores or limited down payment funds. Although they are sometimes for repeat homeowners, these national programs can be very helpful for people who are buying a first home or who haven’t owned a home in several years.

The mortgages are generally for single-family homes, two- to four-unit properties that will be owner occupied, approved condos, townhomes, planned unit developments, and some manufactured homes.

Federal Housing Administration (FHA) Loans

The FHA, a part of the U.S. Department of Housing and Urban Development (HUD), insures mortgages for borrowers with lower credit scores. Homebuyers choose from a list of approved lenders participating in the FHA loan program. Loans offer competitive interest rates and require down payments of 3.5% of the purchase price. Borrowers typically need FICO® credit scores of 580 and up. A buyer with a score as low as 500 must put down 10% or more.

FHA loan limits in 2025 range from $524,225 for single units to $1,008,300 for four-unit properties, with higher limits in high-cost areas.

In addition to looking at your credit score, lenders will examine your debt-to-income ratio (DTI, or your monthly debt payments compared with your monthly gross income). FHA allows a DTI of up to 57%, vs. a typical 45% maximum for a conventional loan.

Gift money for the down payment is allowed from certain donors and will be documented in a gift letter for the mortgage.

FHA loans always require mortgage insurance premiums (MIP): This includes a fee of 1.75% of the base loan amount, which can be rolled into the loan, upfront. Borrowers also carry annual premiums for the life of the loan. As of 2025, monthly MIP for new homebuyers is 0.15% to 0.75%. A down payment of at least 10% allows the removal of mortgage insurance after 11 years. For a $300,000 mortgage balance, upfront MIP would be around $5,250 and monthly MIP, at a rate of 0.55%, would be about $137.

To learn more about these loans, including FHA loans for refinancing and rehabbing properties, read up on FHA requirements, loan limits, and rates.

Freddie Mac Home Possible Mortgages

Low- and very low-income borrowers may make just a 3% down payment on a HomePossible® mortgage. These loans allow various sources for down payments, including co-borrowers, family gifts, employer assistance, secondary financing, and sweat equity.

The Home Possible mortgage is for buyers who have a credit score of at least 660. Once you pay 20% of your loan, the Home Possible mortgage insurance will be canceled, which will lower your mortgage payments.

Fannie Mae HomeReady Mortgages

Fannie Mae HomeReady^® Mortgages allow down payments as low as 3% for low-income borrowers. Applicants generally need a credit score of at least 620; pricing may be better for credit scores of 680 and above. Like the Freddie Mac program, HomeReady loans allow flexibility for down payment financing, such as gifts and grants.

For income limits, a comparison to an FHA loan, and other information, go to this Fannie Mae site.

Fannie Mae Standard 97 LTV Loan

The conventional 97 LTV loan is for first-time homebuyers of any income level who have a credit score of at least 620 and meet debt-to-income criteria. The 97% loan-to-value mortgage requires 3% down. Borrowers can get down payment and closing cost assistance from third-party sources.

Department of Veterans Affairs (VA) Loans

Active members of the military, veterans, reservists, and surviving spouses who are eligible may apply for loans backed by the Department of Veterans Affairs. These loans designed for those who serve our country can be used to buy, build, or improve homes, have lower interest rates than most other mortgages and don’t require a down payment. Most borrowers pay a one-time funding fee that can be rolled into the mortgage.

Another VA loan advantage is that they do not require PMI for borrowers who make a down payment of less than 20%. And they have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

They have more flexible credit score requirements. In some cases, even those who have previously been in foreclosure or bankruptcy can qualify.

Borrowers applying for a VA loan will need a Certificate of Eligibility from the VA so make sure to review a guide to qualifying for a VA loan as a first step in the process.

💡 Quick Tip: Active duty service members who have served for at least 90 consecutive days are eligible for a VA loan. But so are many veterans, surviving spouses, and National Guard and Reserves members. It’s worth exploring with an online VA loan application because the low interest rates and other advantages of this loan can’t be beat.†

Native American Veteran Direct Loans (NADLs)

Eligible Native American veterans and their spouses may use these no-down-payment loans to buy, improve, or build a home on federal trust land. The VA is the direct lender on NADLs and charges a funding fee. Learn more by emailing [email protected].

US Department of Agriculture (USDA) Loans

No down payment is needed on these loans to moderate-income borrowers that are guaranteed by the USDA in specified rural areas. Borrowers will pay an upfront guarantee fee and an annual fee that serves as mortgage insurance.

The USDA also issues direct loans to low- and very low-income people. Check out this USDA website for eligibility requirements.

HUD Good Neighbor Next Door Program

This program helps police officers, firefighters, emergency medical technicians, and teachers qualify for mortgages in the areas they serve. Borrowers can receive 50% off a home in what HUD calls a “revitalization area.” They must live in the home for at least three years.

Visit the HUD program page for more information.

First-Time Homebuyer Stats for 2025

Ever wonder where you fit amid the mix of buyers who are out there shopping for a home? Here are some stats to consider:

•   Percentage of buyers nationwide who are first-time buyers: 24%

•   Median age of first-time homebuyers: 38

•   Median down payment percentage for first-time homebuyers: 9%

•   Average credit score in Arizona: 712

•   Median single-family home value for Arizona properties: $434,739

•   Average home price per square foot in Arizona: $252

Recommended: Understanding Mortgage Basics

Additional Financing Tips for First-Time Homebuyers

In addition to federal and state government-sponsored lending programs, there are other financial strategies that may help you as a homebuyer in Arizona. Some examples:

•  Traditional IRA withdrawals. The IRS allows qualifying first-time homebuyers a one-time, penalty-free withdrawal of up to $10,000 from their IRA if the money is used to buy, build, or rebuild a home. A first-time homebuyer, for the purposes of IRA withdrawals, is someone who has not owned a principal residence in the last two years. You will still owe income tax on the IRA withdrawal. If you’re married and your spouse has an IRA, they may also make a penalty-free withdrawal of $10,000 to purchase a home. The downside, of course, is that large withdrawals may jeopardize your retirement savings.

•  Roth IRA withdrawals. Because Roth IRA contributions are made with after-tax money, the IRS allows tax- and penalty-free withdrawals of contributions for any reason as long as you’ve held the account for five years. You may also withdraw up to $10,000 in earnings from your Roth IRA without paying taxes or penalties if you are a qualifying first-time homebuyer and you have had the account for five years. With accounts held for less than five years, homebuyers will pay income tax on earnings withdrawn.

•  401(k) loans. If your employer allows borrowing from the 401(k) plan that it sponsors, you may consider taking a loan against the 401(k) account to help finance your home purchase. With most plans, you can borrow up to 50% of your 401(k) balance, up to $50,000, within a 12-month period without incurring taxes or penalties. You pay interest on the loan, which is paid into your 401(k) account. You usually have to pay back the loan within five years, but if you’re using the money to buy a house, you may have up to 15 years to repay.

•  State and local down payment assistance programs. Usually offered at the regional or county level, these programs provide flexible second mortgages for first-time buyers looking into how to afford a down payment.

•  The mortgage credit certificate program. First-time homeowners and those who buy in targeted areas can claim a portion of their mortgage interest as a tax credit, up to $2,000. (This doesn’t lower your mortgage payments, but can still be a good way to save.) Any additional interest paid can still be used as an itemized deduction.

To qualify for the credit, you must be a first-time homebuyer, live in the home, and meet income and purchase price requirements, which vary by state. If you refinance, the credit disappears, and if you sell the house before nine years, you may have to pay some of the tax credit back. There are fees associated with applying for and receiving the mortgage credit certificate that vary by state. Often the savings from the lifetime of the credit can outweigh these fees.

•  Your employer. Your employer may offer access to lower-cost lenders and real estate agents in your area, as well as home buying education courses.

•  Your lender. Always ask your lender about any first-time homebuyer grant or down payment assistance programs available from government, nonprofit, and community organizations in your area.

The Takeaway

If you can qualify for one of the many homebuyer programs in Arizona, or a federal program, you may be able to achieve your goal of purchasing a property, despite housing costs being above the national average. You may also want to look into what commercial lenders offer to see what your options are in terms of covering your down payment, mortgage, and closing costs.