The Arizona Housing Finance Authority (AzHFA) announced two initiatives valued at a combined $25 million to support first-time homebuyers through the agency’s Homes for Arizonans initiative. A total of $10 million in fixed-rate, low-interest mortgage financing will be made available through the agency’s Mortgage Revenue Bond (MRB) program. Mortgage Credit Certificates (MCCs), a second homebuyer program, will offer federal income tax credits for eligible borrowers representing over $15 million in assistance. Both programs will assist first-time homebuyers purchasing in 13 rural Arizona counties.
Mortgage Revenue Bonds (MRBs) are tax-exempt bonds that state & local governments issue through housing finance agencies (HFAs) to help fund below-market-interest-rate mortgages for first-time qualifying homebuyers. To be eligible, borrowers must qualify for a conventional loan, or government-backed loan products such as FHA, VA, & USDA-RD or a qualifying Fannie Mae or Freddie Mac conventional loan. Additionally, other qualifying criteria include limits on selected home prices & total household income. In general, family incomes must be below 115 percent the selected area’s median income. In a few instances, some program restrictions are waived for homes located in specific census tracts. Participating lenders can provide more information on which census tracts qualify for exceptions. A list of participating lenders is available on the agency's web site. at housingaz.com.
The Mortgage Credit Certificate (MCC) program provides a federal income tax credit for eligible borrowers for first-time homes throughout the life of the original loan. The annual credit is equivalent to 20% of the annual interest paid or accrued on the mortgage loan. Home buyers are responsible for obtaining a loan through a lender of their choice, & a one-time program fee, equal to 1% of the loan amount is assessed. The annual tax credit provides a federal income tax savings for the homebuyer & may help to qualify for a larger mortgage.
A third program available through the AzHFA provides down payment & closing cost assistance. Through this Homes for Arizonans initiative, up to $20,000 of combined assistance may be available for eligible first-time buyers. All persons receiving this assistance are required to complete a homeownership education program, & additionally contribute a portion of their own funds towards the purchase price of the home. If a buyer’s income is above 80% of the Area Median Income (AMI), down payment & closing cost assistance must be used in combination with the MRB or MCC programs. Should a buyer sell the home, or fail to use it as a primary residence, the down payment & closing cost assistance must be repaid.
If you are interested in more information on these programs, contact a participating lender or phone (602) 771-1000.