Home in Five Advantage Increases Grants to Individuals Who Earn $31,450 or Less

January 18, 2017
Phoenix IDA

Home in Five Advantage
Borrowers will receive $5,000 on average

Home in Five Advantage, a mortgage down payment assistance program that has provided more than $106 million to individuals and families buying homes in Phoenix and Maricopa County, is increasing its non-repayable grant program. Individuals who earn $31,450 or less annually are now able to qualify for approximately $5,000 in down payment assistance.

The Phoenix IDA and Maricopa County IDA collaborated to create the Home in Five Advantage program in 2012. Qualified buyers obtain a 30-year fixed rate FHA, VA, USDA-RD or conventional (Fannie Mae HFA Preferred and Freddie Mac HFA Advantage) loan with up to a 3 percent grant for down payment and closing cost assistance for new or existing homes in Phoenix and Maricopa County.

The program recently began offering homebuyers with an annual income up to $31,450, a supplemental 1 percent grant, in addition to the up to 3 percent the program offers to all qualified homebuyers. All potential borrowers must attend a homebuyer education course and are strongly encouraged to have the home inspected prior to close of escrow, in addition to securing a home warranty.

“Too often homeownership is out of reach for many families in our community,” said Phoenix IDA Executive Director Juan Salgado. “An additional 1 percent down payment assistance will help lower income families overcome a major barrier to homeownership and achieve the financial stability that comes with it.”

Based on its four-year history of aiding homebuyers, the Home in Five program’s data indicates individuals who earn $31,450 or less are highly qualified for mortgage loans. Program numbers show lower income individuals have FICO scores that are 9 points higher than other Home in Five borrowers, who already have good scores of 690 points on average. Further, with the additional 1 percent grant, homebuyers can typically purchase a house with no cash out-of-pocket (after the seller’s contribution to closing costs and the Home in Five grant) and reduce their monthly payment by 5 percent or more compared to current rental costs.

To date, more than 13,500 individuals and families have purchased homes through the program, receiving more than $106 million in down payment assistance on nearly $2.5 billion in total home loans. Qualified U.S. Military personnel, veterans, first responders and teachers remain eligible for an additional 1 percent of assistance.

“Phoenix and Maricopa County IDA’s Home in Five program has helped more than 4,200 people buy homes in Phoenix alone, which has increased the economic vitality of our city,” said Phoenix Mayor Greg Stanton. “With this new incentive more renters across the city can educate themselves and hopefully realize the dream of homeownership.”

“This program can make the dream of homeownership a reality,” said Maricopa County Board of Supervisors Chairman Denny Barney, District 1. “Families invest in their own future and the future of their communities when they own a home where they can establish roots.”

“Homeownership improves a community in so many ways. It adds stability to neighborhoods, helps businesses, and spurs economic development. Besides increasing the well-being of our Maricopa county residents, making homeownership attainable is the right thing to do,” said Shelby Scharbach, executive director of the Maricopa County IDA.

“Down payment programs help bridge the gap, especially as prices continue to increase whereas wages don’t increase at the same pace,” said Brenda Lopez, Director of the Homeownership Center at Trellis, a financial education program for prospective homebuyers. “People are grateful for the down payment assistance.”

“Without the down payment assistance, I would have tapped out my savings,” commented Reese Miller, 42, a gym maintenance supervisor, who bought a home in West Phoenix in 2016. “I would have never had the money to do all the extras. Since moving in, I painted the interior from floor to ceiling…replaced all the light fixtures…and bought appliances. These have already increased the value of my home," Miller said.

The Phoenix and Maricopa County IDAs launched the program after recognizing a need to help credit worthy homebuyers and rebuild neighborhoods affected by foreclosures. In four years, response has been significant. More than 125 lenders are now involved and the program has more than 30 percent of the FHA loan market share in Maricopa county.

Additional information about the program, including a list of approved participating lenders that can help determine whether a buyer is qualified, is available at http://phoenixida.com/our-programs/homeinfive.

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