For many aspiring Arizona DPA, the down payment represents the single biggest barrier to homeownership. Even when monthly mortgage payments would be manageable, coming up with tens of thousands of dollars upfront can feel impossible. Credit Union West offers a solution through its Down Payment Assistance Program (DPA), which can provide substantial grants to help low and moderate-income families bridge this gap and achieve their homeownership dreams. Here is a step-by-step guide on how to apply for Arizona DPA through Credit Union West.
Understanding Credit Union West’s DPA Program
Credit Union West’s Down Payment Assistance Program is designed to help low to moderate-income-earning families overcome the financial barrier to entry for homeownership. The program recognizes that growing savings looks different for everyone, and aims to get families into their dream homes sooner by reducing the amount they need to save before purchasing.
The program offers two distinct tiers based on income level, each providing significant financial assistance:
Limited-Income Borrowers Program
For those at or below 80% of the HUD area median income, the program offers grants that match your initial contributions 4-to-1, up to the annual maximum subsidy limit of $32,000. This means for every $1,000 you contribute toward your down payment (including gift funds), you could receive an additional $4,000 in grant funds. For example, if you save $7,000 for your down payment, the program could provide an additional $28,000, bringing your total down payment to $35,000.
Middle-Income Borrowers Program
Homebuyers whose income falls between 80%-140% of the HUD area median income may qualify for a subsidy up to $50,000. Unlike the low-income program, this assistance doesn’t require matching funds and functions as a straightforward grant.
Both programs can be used not only for down payments but also for closing costs, providing comprehensive support to help you get into your home with minimal out-of-pocket expenses.
Basic Eligibility Requirements
Before diving into the application process, you’ll need to meet several fundamental qualifications:
First-Time Homebuyer Status
You must be a first-time homebuyer or haven’t owned a home in the past three years. This definition is broader than many people realize, if you’ve previously owned a home but sold it more than three years ago, you still qualify as a first-time buyer under this program.
Age and Income Requirements
You must be 18 years of age or older and earning a wage. Annual income is determined at the time of enrollment in the Down Payment Assistance Program and based on income eligibility guidelines published by the Federal Home Loan Bank of San Francisco. Your income will be evaluated against the HUD area median income for your specific location to determine which tier of assistance you qualify for.
Property Location
The property must be located in Arizona and will serve as your primary residence. The program is designed for owner-occupied housing, not investment properties or second homes.
Credit Union West Membership
You must qualify as a Credit Union West member to access the program. If you’re not already a member, you’ll need to open an account and meet the credit union’s membership requirements.
The Application Process: Step by Step
Step 1: Apply for a Home Loan
The first step is straightforward: Apply for a Home Loan, and Credit Union West will evaluate if you qualify for the Down Payment Assistance Program. You don’t need to apply separately for the DPA program initially, Credit Union West’s real estate specialists will assess your eligibility as part of your overall mortgage application review.
During this initial application, you’ll provide standard documentation, including:
- Proof of income (pay stubs, W-2s, tax returns)
- Employment verification
- Bank statements showing your assets
- Credit history authorization
- Personal identification documents
Be thorough and accurate with this documentation, as it forms the basis for both your mortgage approval and DPA qualification.
Step 2: Work with Real Estate Specialists
Credit Union West’s real estate specialists will walk you through the mortgage process from start to finish, providing expert guidance so you can make an informed, stress-free decision. These specialists understand the nuances of the DPA program and can help you understand how much assistance you might receive based on your income level and contribution amount.
This is the time to ask questions about:
- How much home can you afford with DPA assistance
- What your monthly payments will look like
- How the grant repayment terms work
- Timeline for approval and closing
- Any additional programs or resources you might qualify for
Step 3: Understanding the Grant Structure
If approved for the DPA program, you need to understand how the grant works and your obligations:
For Limited-Income Borrowers:
There will be a lien placed against the subject property for the amount of the grant that will remain on the property for five years. The amount owed will decrease by 20% for each year the borrower retains homeownership of the property as their primary residence.
Here’s how the forgiveness works: If you receive $20,000 in DPA, after year one, you’ll owe $16,000; after year two, $12,000; after year three, $8,000; after year four, $4,000; and after five years, the entire amount is forgiven and the lien is released.
No payments toward the grant are due as long as the homebuyer resides in the property and abides by the terms of the grant and the loan. However, the grant must be paid back if the property is sold or refinanced before the five-year period ends, with repayment calculated on a pro-rated basis based on how many years you’ve lived in the home.
For Middle-Income Borrowers:
No repayment of the subsidy is due at any time. This makes the middle-income program particularly attractive, it’s essentially free money that you never have to repay, regardless of when you sell or refinance.
Step 4: Sign Required Documents
The grant recipients must sign a Promissory Note, Deed of Trust, and Rider to the Deed of Trust. These legal documents formalize your agreement to the terms of the DPA program and establish the lien on your property (for low-income borrowers). Your real estate specialist will explain each document and ensure you understand your obligations before signing.
Step 5: Get Pre-Qualified
Credit Union West offers the ability to get pre-qualified, which is highly recommended before you start house hunting. Pre-qualification shows sellers that you’re a serious buyer with financing already lined up, strengthening your position in negotiations. With DPA assistance factored into your pre-qualification, you’ll know exactly what price range to shop within.
Important Limitations and Considerations
While the DPA program offers substantial benefits, there are important limitations to understand:
Not a Guarantee
Enrollment in the Down Payment Assistance Program is not a guarantee to the homebuyer of receipt of funds. The program is subject to credit approval, program availability, terms and conditions, and is limited offer and while supplies last. This means funding can run out, so applying early in the fiscal year may improve your chances.
Additional Restrictions Apply
The DPA program comes with various restrictions that Credit Union West will explain during the application process. These may include limits on the type of property you can purchase, maximum purchase prices, and specific occupancy requirements.
Credit and Income Verification
Your credit history must demonstrate your ability to repay the mortgage, even with DPA assistance. If you have credit challenges, address them before applying, or ask Credit Union West about credit counseling resources that might help improve your qualification prospects.
Maximizing Your DPA Benefits
To get the most from Credit Union West’s DPA program, consider these strategies:
Save as Much as Possible for Low-Income Tier
If you qualify for the low-income borrower program with the 4-to-1 match, every dollar you save gets quadrupled. Even small additional savings can result in thousands more in assistance. If possible, aim to contribute enough to hit the maximum level.
Include Gift Funds
The program allows gift funds from family members to count toward the contribution that gets matched. If relatives are willing to help, their gifts will be leveraged 4-to-1, multiplying their generosity.
Plan for the Five-Year Commitment
If you receive investmente under the limited-income program, plan to stay in your home for at least five years to receive full forgiveness. Moving or refinancing earlier means repaying a portion of the grant, which could strain your finances.
Ask About Complementary Programs
Credit Union West may offer additional programs or benefits for first-time homebuyers beyond DPA. Ask about reduced closing costs, competitive interest rates, or other assistance that could further reduce your out-of-pocket expenses.
The Bottom Line
Credit Union West’s Down Payment Assistance Program represents a genuine opportunity for Arizona residents who thought homeownership was out of reach. Whether you qualify for the 4-to-1 matching program or the subsidy, the assistance can transform your homebuying prospects by eliminating or drastically reducing the down payment barrier.
For Arizona families earning low to moderate incomes who dream of owning their own home, Credit Union West’s DPA program offers more than financial investment, it offers hope and a clear pathway to making that dream a reality. The key is taking the first step: reaching out to Credit Union West, starting the application process, and discovering whether this program can help turn your homeownership aspirations into actual keys in your hand.
