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Arizona First Time Home Buyer Guide: What Options Are Available for You?

Josh Rapaport
July 17, 2023

What to Know as a First-Time Home Buyer-Arizona

Purchasing your first home in Arizona can be an exciting life event. The American Southwest is a unique part of the country to live in, and first-time homebuyers in Arizona have much to look forward to when they become owners.

Buying a home involves a complicated process. The home’s purchase price is typically beyond what most buyers have available in terms of capital. There are also legally binding contracts that will be signed and many financial details to work out before an Arizona home loan is completed.

3 Things First-Time Homebuyers Must Know About

As you consider entering the homebuying process, the complexity of the various steps can be overwhelming, especially for your first purchase. Home buyers should be aware of everything that lies in store for them to make the process a little simpler.

Here are three things you need to know about buying your first home in Arizona.

1. Mortgage Programs

The purchase price of the average home can be very high, though it depends on the state of the market, the condition of the property, and other factors.

Since most home buyers do not have the capital to afford this cost upfront, they will apply for a mortgage loan to help pay for the house.

Mortgage lenders will loan the money needed to cover the purchase price while the borrower agrees to pay back this amount over time plus interest. Depending on your circumstances, you may be eligible for various loan products.

Conventional Loans

An Arizona conventional loan is any mortgage not guaranteed or insured by a government entity like the Federal Housing Administration or the Department of Veterans Affairs. A conventional loan can fall under two categories; conforming or non-conforming.


Two real estate organizations, Fannie Mae and Freddie Mac, will set limits for loans they are willing to purchase in the secondary real estate market.

In 2023, the maximum purchase price limits are an average of $726,200. More competitive markets in Arizona, like Maricopa County, will have slightly higher limits. A conventional mortgage that falls within this limit is considered conforming.


When loan amounts exceed the limits Fannie Mae and Freddie Mac set, they are considered non-conforming. Another name for them is jumbo loans. These larger loans are considered too risky to back by the two real estate organizations and will have stricter requirements for borrowers.

Non-Conventional Loans

Any mortgage loan insured or guaranteed by a federal government agency is considered non-conventional. Multiple types of loan programs fall under this category.

FHA Loans

An FHA loan, or Federal Housing Administration loan, is granted to people who may not be able to meet the restrictions of a conventional loan program.

They may have a lower credit score, or household income limits relative to the area median income that prevents them from being approved for other loan programs. An Arizona FHA mortgage loan helps buyers with limited resources access homeownership.

VA Loans

A VA loan is available to active-duty service members, eligible veterans, or surviving spouses. This loan program benefits those who have served in the armed forces and their families if they meet certain requirements.

The benefits of an Arizona VA loan include lower down payments, better mortgage rates, and no private mortgage insurance requirements.

USDA Loans

A USDA loan is reserved for low-to-moderate-income buyers with insufficient money for a down payment in rural areas.

First-time buyers looking for a loan program with no down payment requirement can purchase a home in eligible rural areas with the help of a USDA loan.

2. Factors That Affect Your First Mortgage

No matter what mortgage program you are eligible for, there will be monthly payments that you have to make to the lender over an agreed-upon period. Many factors will affect the amount of these payments and the length of the loan term.

Credit Score

Your credit score is a reflection of your payment history with personal debt. Lenders will analyze your credit history to see if you are a reliable borrower. The higher your score, the better the loan terms you can obtain.


Your debt-to-income ratio is a comparison of your monthly income with your debt. A higher DTI ratio means you are a riskier borrower, so lenders will look into your financial situation to determine the DTI.

Depending on the programs you are looking into, the requirements for your DTI may vary for loan approval.

Interest Rates

The interest rate is how lenders make money on a loan transaction. The borrower pays back the purchase amount, but they also pay for interest.

In general, your credit record can affect the level of interest rate you qualify for. The local real estate market can also impact the mortgage interest for your loan.

Lastly, the loan agreement impacts what your interest rate payments will be.

For example, a 30-year fixed-rate mortgage means that the interest rate will not change for the duration of the loan. Meanwhile, an adjustable-rate mortgage can change depending on the market.

Down Payment

A down payment is the money that a home buyer pays upfront for the price of a property. The size of this down payment will affect the total cost of the loan. The larger the down payment, the lower your monthly payments will be.

Private Mortgage Insurance

Private mortgage insurance is a tool lenders use to cover some of the risks that come with borrowers who cannot afford an adequate down payment. This mortgage insurance helps cover the lender if the home buyer misses payments.

Closing Costs

Closing costs are another factor that can affect the total cost of a loan. In many cases, first-time buyers are unaware of closing fees and how they can affect the transaction.

These costs include attorney fees, loan creation fees, lender fees, title search costs, one month’s mortgage payment, property transfer fees, and others. The costs of closing for a home in Arizona usually cost 3-6% of the total price of a home purchase.

3. First Time Buyer Resources

Other first-time homebuyer programs and local resources exist to help educate buyers about the process and make things smoother.

Serious homebuyers should consider taking advantage of these resources to improve their chances of obtaining and keeping their first home.

Homebuyer Education Course

Many buyers go into the purchasing process without doing enough research. This often results in surprises and questions during the transaction, causing additional stress or even causing them to question whether they should buy a home.

However, a complete homebuyer education course can set you up for success with your first mortgage and home purchase.

There are multiple course options for homebuyer counseling that you can take to understand the ins and outs of the process.

Mortgage Calculators

Sometimes the best way to figure out what you can afford is to play with the numbers yourself. A mortgage calculator is a simple way to fiddle with the various factors involved in loan costs, from the down payment to the interest rate to taxes and insurance.

Buying Your First Home with District Lending

Working with the right lender can make all the difference in your homebuying journey.

Home buyers in the Grand Canyon state can gain an advantage over others by partnering with District Lending to secure their loan products and move through the purchasing process quickly.

Discussing Loan Requirements

If you are a prospective home buyer, you likely have many questions about the types of loan programs available to you. Each different loan program has different requirements that may qualify or disqualify you.

With District Lending, you can talk through all the details of the requirements, such as the maximum loan amount you can afford, the minimum credit score for a specific type of loan, how household income will affect your opportunities, and the down payment and closing costs that may be involved.

1% Down Payment Assistance Program from District Lending

If you are looking for a home with a purchase price of 350K or under, check out our 1% down payment program to see if you qualify.

With no monthly mortgage insurance and down payment assistance from the lender, this is one of Arizona’s best first-time homebuyer programs, enabling affordable homeownership.

Finding the Right Loan for Your Needs

In your hunt for a primary residence, figuring out the details and affordability can be overwhelming.

Together, we will find a loan product with the right minimum credit score requirements, down payment standards, and terms so that you can look forward to moving into an Arizona property.

Get in touch with District Lending for a free quote. Then we can discuss your goals for your primary residence in Arizona.

Buy a home and refinance at no cost.
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