The first is a list of organizations that offer grants that are both tax free and don’t have to be paid back for qualified people. These are state grants that come from a variety of offices across the state, and they can help you with both closing costs and down payments. There are forms which you can obtain from the Arizona Department of Housing website that will help get you on your way, as well as many places you can find online that will help you fill out the request forms. Here’s a listing of some of the organizations you can apply to:

Arizona Southwest Housing Foundation Down Payment Gift Program (GIFT) (480) 926-7206
Flagstaff Affordable Housing Coalition Inc Community Homebuyer Assistance Program (CHAP) (520) 214-7456
Glendale Los Vecinos Housing Development, Inc. First Time Homebuyer Program (FTHB) (623) 435-2255
Multi Counties Community Services of Arizona Rural Home Purchase Assistance Program (RHAP) (602) 280-1365
Northern Arizona Council of Government, Rural Home Purchase Assistance Program (RHAP) (928) 773-1135
Phoenix Community Housing Resources of Arizona (CHRA) Homeownership Incentive Program (HIP) (602) 631-9780
Phoenix Neighborhood Housing Services of Phoenix Down Payment Closing Cost Assistance Program (DPCC) (602) 258-1659
Phoenix Valley-CoRP Downpayment Assistance Program (DAP) (602) 247-4764
Pima County Family Housing Resource Wells Homebuyer Assistance Gift (GIFT) (520) 318-0993
Pima County Pima Gold Home Program (520) 882-0018
San Luis Comite de Bien Estar Inc Forgivable Loan Gap Financing Program (FLGF) (928) 627-8559
Southern Arizona Government Organization, Rural Home Purchase Assistance Program (RHAP) (520) 432-5301
Tempe Community Assisted Mortgage Program (480) 350-8961
Tucson TMM Family Services Inc. Federal Home Loan Bank of San Francisco Affordable Housing Program Homeownership Opportunities II (AHP) (520) 322-9557
Tucson TMM Family Services Inc. First Time Home Buyer Grant Program (GRANT) (520) 322-9557
Yuma County Housing America Corporation Rural Home Purchase Assistance Program (RHAP) (928) 627-4221

Next there’s The Arizona Housing Finance Authority, which offers two bond programs and a mortgage credit certificate to assist prospective home buyers in Arizona. This can help you get financing for your home, most of it tax free. The Authority can also help those who are trying to rent apartments with down payments as well.

Finally, there is a program coming from a company called The Lending Company, which offers ways for new and low income home owners to get a home by putting only 1% of the cost of the home as a down payment. They’re also able to offer qualified candidates a gift for as much as 2.5% of the down payments of a home. This one has a minimum FICO credit score of 620 required to qualify for any assistance.

See also:

Home Buyer Tax Credit Extension
Buying New vs. Existing Homes

*     This isn’t like cramming for a test.  Purchasing a home is one of the biggest investments most of us will make and it deserves the appropriate amount of consideration.  You need to check out neighborhoods, schools, floor plans and more.  Do not assume you’ll find the perfect match if you start looking in March.  You might make the deadline for getting a home under contract, but will it be the right home for you and your family?

*     The 2009 tax credit worked.  It brought out lots of buyers in our metro Phoenix market.  That credit was set to expire on November 30, 2009 and buyers were trying like crazy to get something in escrow by mid to end of October in order to close by the deadline.  That rush of buyers caused bidding wars on some homes.  We saw bids more than $8,000 over asking price from people who wanted to take advantage of the $8,000 tax credit!  Tie something up early, avoid the rush!

*     The new tax credit has an additional feature, it allows up to a $6,500 tax credit for people who are NOT FIRST TIME HOME BUYERS.  That means increased competition – more people in the market for the same homes.  You might think that will also increase the supply if those move-up buyers are listing their homes for sale, but the truth is, they don’t have to, they can rent out their existing home, purchase another home and still receive the tax credit.

*     Escrows don’t always close on time.  Lenders and title companies were very concerned about how many closings could be jammed into the last few days of November to make the original deadline.  If too many people are trying to close escrow on the same day, some will not make it.  If the tax credit had not been extended, the closings that roll over to December 1^st would not be eligible for the tax credit – a huge disappointment to buyers counting on that money.  Give yourself buffer time, find a home early and get the closing scheduled for well before the deadline to allow for any potential delays.

 *     Some experts predict that interest rates will begin to increase sometime in the first 6 moths of 2010.  Interest rates are incredibly low now, if rates creep up your buying power decreases, for example a purchase price of $150,000 with an FHA loan for 30 years at 5.25% interest rate equals a principle & interest payment of approximately $828.  But if the interest rate increases even by 1% to 6.25% your P & I payment increases to approximately $923 – almost a $100.00 increase (* Please note, these payments do not include taxes and insurance which should each be quoted on an individual basis – please contact a mortgage broker for exact figures.  If you don’t have one, call me for a recommendation).

*     Be realistic about short sales.   If you are considering purchasing a short sale, you need to be aware that it can take many months to get bank approval.  You are at the mercy of the bank and you could miss the tax credit deadline altogether.  The longer you wait the more you should consider traditional sales or bank owned properties.

If these reasons aren’t enough to motivate you to start looking now, call me.  We can share more of our experiences with you!   The National Association of Home Builders has a great webpage with more details on these programs - Click Here to View and be sure to check out the details of the tax credit and the income limitations.

Anyone who may be interested in home ownership in the next few years should be taking a hard look at this now.  Prices and interest rates are historically low and a dollar for dollar tax credit is the icing on the cake.  This is a “Trifecta” of home buying advantages – don’t miss out.  “He who refuses to embrace a unique opportunity loses the prize as surely as if he had failed.”  – William James.

Call  me anytime – we are always happy to help!

Teresa Dempsey – Associate Broker, Keller Williams Legacy One Realty

480-634-7975 – Direct

The signs are all around you.  The media spouts the phrase “Buyer’s Market.”  You know plenty of people whose mortgage balance exceeds today’s market value.  And some builders are reporting that their costs to build are greater than the sale price that the homes can bring.  PRICES ARE LOW . . . but you already knew that!

Here are a few facts you may not know.  May was an excellent month for residential sales in the Phoenix area.  Data from the Arizona Regional Multiple Listing Service show there was more than 9,200 residential sales in May of 2009.  That volume is similar to our “boom” market of 2005! And supply is shrinking – there is only about a 4 month supply of homes priced under $250,000.  This number is down significantly from one year ago.  DEMAND IS UP.

What does that mean to you?  If you think that you will need a new home within the next two years, you need to consider buying now.  Remember our economic basics, when demand is increasing and supply is decreasing there is a strong possibility of prices going up.  These are signs of another change in the market.  No one can say how quickly the market will change (a crystal ball would come in handy about now!).  And there are plenty of negative factors still plaguing our economy, like unemployment and new foreclosures.  However, some believe that even the imminent foreclosures may not cause much of a problem considering current absorptions rates.

So, if you are a first time home buyer – there is no reason to wait.  If you act now you can take advantage of the low prices, great interest rates and the First Time Home Buyer’s Tax Credit that will expire at the end of this year.  This is one of the greatest combinations of buying incentives in recent history.  It’s your chance, don’t miss it!

If you currently own a home, your decision is a little more complicated.  Can you sell your existing home?  Do you have any equity left in your existing home?   If purchased your home before 2002 and didn’t refinance – the answer could be yes.  If the answer is no, there are still other options available to you.  For example, lease out your current home.  A time-tested piece of wisdom tells us to “Buy Low, Sell High.”  So buy your next home now while prices are low and wait to sell your existing home until the market has turned around.  History has shown us real estate is cyclical; the market will shift, again and again.

So what’s your next step?  Consider this warning from Mark Twain, “I was seldom able to see an opportunity until it had ceased to be one.”  Recognize the opportunities in today’s market!  Then, contact a Real Estate Professional who can help you evaluate your current situation and prepare a strategy.

For more information on the First Time Home Buyer’s Tax Credit see the IRS Information Page

Teresa Dempsey (480) 634-7975  DempseyAZ.com