Saving enough money for a down payment on a home is a hurdle that most home buyers face early on. Lenders view a down payment as one part of your financial picture, but the amount you need depends on the loan, the property and your qualifications.
A larger down payment may lower your monthly payment and, with some loans, reduce or remove mortgage insurance. But 20% is not the only path to homeownership. The right target is the amount that fits your loan options while leaving room for closing costs, moving expenses and an emergency fund.
Down payment assistance programs can lower the amount you need to save or provide funds toward your down payment and closing costs. Because programs and rules change, the best first step is to review current options with a lender before setting your savings goal.
Compare Low- and No-Down-Payment Loan Options
Eligible military borrowers and some rural home buyers may qualify for VA or USDA financing with no down payment. FHA and certain conventional loans may allow a smaller down payment. Each option has its own rules, mortgage insurance, fees and total monthly cost, so compare the complete loan rather than choosing by the down payment alone.
Program names, limits and eligibility rules can change. Ask your lender to confirm what is available now and which option fits your credit, income, location and plans for the home.
Look Into Specialized Assistance Options
Some assistance is designed for first-time buyers, certain professions, veterans or households within local income limits. Help may come as a grant, a forgivable loan or a second loan that must be repaid later. Make sure you understand what happens if you sell, refinance or move before the assistance period ends.
Explore Arizona and Local Programs
Arizona and local organizations may offer help with down payments or closing costs through approved lenders. Availability, funding and requirements can change, so confirm the current details before you count on a program in your home-buying budget.
The Arizona Home Plus Program
Home Plus is a statewide program administered by the Arizona Industrial Development Authority, and it is the only state-run down payment assistance program available in every Arizona county, city and zip code. It pairs a 30-year fixed-rate first mortgage with assistance toward your down payment, your closing costs, or both, so you do not have to save the full amount up front. The assistance percentage depends on the loan type and the program’s current terms. You do not have to be a first-time buyer to qualify.
How Home Plus Assistance Works
The assistance is calculated as a percentage of your first mortgage balance, up to 4%. On a $300,000 loan, 4% comes to $12,000 toward your down payment and closing costs. It arrives as a deferred second mortgage with no interest and no monthly payment, and it is completely forgiven after five years in the home. Because it sits on a second mortgage, it is not added to the balance of your first loan.
That five-year clock is the detail worth understanding before you commit. If you sell or refinance before the assistance is fully forgiven, the remaining portion generally has to be repaid. If you stay in the home five years, the assistance costs you nothing.
Home Plus works alongside several loan types, including VA loans, FHA, USDA, Fannie Mae and Freddie Mac conventional loans. Conventional Fannie Mae and Freddie Mac loans through Home Plus also carry reduced mortgage insurance premiums. Since the assistance percentage and the loan terms move together, compare the complete monthly cost of each pairing rather than choosing by the assistance figure alone.
Home Plus Eligibility
Home Plus sets limits on both the borrower and the property. The current requirements are:
- The home must be your primary residence
- Borrower income must not exceed $155,386 per year, as of April 2026
- A minimum credit score of 640, though this varies by loan type
- A debt-to-income ratio generally capped between 45% and 50%, depending on your credit score and loan type
- One borrower must complete a homebuyer education course before closing
There is no separate purchase price cap under Home Plus. Your limit is whatever the underlying loan program allows, and FHA, VA, USDA and conventional loan limits vary by county. Note that the income limit is updated periodically, so confirm the figure that applies when you actually apply.
The first step is a conversation with a participating lender to confirm you qualify and to lock in which assistance level fits your loan. Once that is settled you can start house hunting, negotiate your contract, and bring it back to your lender to begin the loan itself.
Build a Practical Down Payment Plan
Start With a Real Target
Ask a lender for a realistic home-price range and estimates for the down payment, closing costs and monthly payment under more than one loan option. This gives you a useful savings target instead of an arbitrary percentage.
Make Room in Your Monthly Budget
Review recurring expenses and choose a few cuts you can maintain. Redirect that money into a separate home fund automatically each payday. Small, consistent transfers are easier to track and protect than saving whatever happens to be left at the end of the month.
High credit-card balances can also work against your goal. Paying them down may free up monthly cash and strengthen your overall loan application. Balance debt payoff with down payment savings based on guidance from your lender.
Check Every Source of Funds Early
If family gifts, grants or assistance programs may be part of your plan, tell your lender early. The lender can explain which sources are allowed and what records are needed so a last-minute documentation problem does not delay closing.
Be Careful With Retirement Savings
Using retirement money for a home can create taxes, penalties or lost future growth. Rules depend on the account and your situation, and they can change. Before withdrawing or borrowing, speak with a qualified tax or financial professional and ask your lender whether another path would protect your long-term savings.
Choose the option that gets you into a home without leaving you financially stretched. We are here to help you compare current loan and assistance choices, set a realistic savings goal and understand the full cost before you move forward.
Jimmy Vercellino is an experienced Phoenix mortgage lender. He and his team work hard to provide a timely, efficient and excellent home loan process for buyers. As a loan specialist, Jimmy manages the entire process for his clients, making the home buying experience a pleasure instead of filled with stress.