Arizona Mortgage Guide

$425K median, and nearly all of it is concentrated in the Phoenix-Scottsdale metro. Scottsdale averages $700K+, while Gilbert and Chandler (popular family suburbs) sit at $500K-$550K. The surprise is how affordable Tucson remains — $320K median, a university town with actual culture, and genuine mountain scenery.

Arizona is in a balanced-to-buyer's market right now. The 2020-2022 frenzy that saw investors snapping up entire subdivisions has cooled hard. Phoenix inventory has roughly doubled from the 2022 low, and price cuts are common on homes that sit longer than 30 days. Sellers are paying closing costs again — 2-3% concessions are normal in negotiations.

Property taxes are a genuine advantage at 0.66% — about $2,800/year on the median home. No state income tax deduction for mortgage interest (Arizona has a flat 2.5% income tax), but the low taxes and low insurance costs make the total monthly outlay very competitive compared to California or Colorado.

Arizona has one program worth knowing about: the Home Plus Program through the Arizona Department of Housing. It's actually pretty straightforward compared to what other states offer, but the assistance is smaller than you might hope for.

Here's what you get: a 30-year fixed-rate mortgage at a competitive rate, plus up to 5% in down payment assistance that comes as a second mortgage. That second loan is at 0% interest and you don't make payments on it – but you do have to pay it back when you sell, refinance, or pay off the first mortgage. So it's not free money, it's deferred money. The program works statewide, whether you're buying in Phoenix, Tucson, Flagstaff, or anywhere else.

The income limits are going to be the main barrier. They vary by county and household size, but in Maricopa County (Phoenix area) you're looking at caps around $110,000-$120,000 for a family of four. Pinal and Pima counties have slightly different numbers. You also need to be a first-time buyer or haven't owned in three years.

The Pathway to Purchase program is worth mentioning too – it's geared toward moderate-income buyers and can get you even lower rates, but the income limits are tighter and the properties have to meet specific price caps.

Both programs require you to take a homebuyer education course before closing. Not optional.

Check azhousing.gov for current income limits and rates since they adjust these quarterly. You'll apply through participating lenders, not directly through the state, so find one who's actually approved for these programs before you get too far into things.

Here's the thing that catches people off guard: Arizona is a non-judicial foreclosure state, and it's fast. Like, shockingly fast compared to most places. If you default, the lender doesn't have to go through court—they can move straight to a trustee's sale. From the first missed payment to losing the house, you're looking at around 90-120 days. That's it.

The process kicks off with a Notice of Trustee's Sale, and once that's recorded (typically after you're 90 days behind), you've got 90 more days before the property can be sold at auction. There's no redemption period after the sale either, which means once your home is sold, you're out. You don't get to buy it back later like in some states.

And here's what really throws people: Arizona has something called an "anti-deficiency law" under A.R.S. § 33-814(G), but it only applies to purchase money loans on properties of 2.5 acres or less. So if you bought a house in Scottsdale or Tucson with your original mortgage and it forecloses, the lender can't come after you for the difference if they sell it for less than you owed. But refinance that loan or take out a HELOC? You might be on the hook for the deficiency.

Brief note: consult a real estate attorney if you're ever facing foreclosure, because the specifics matter a lot here.

Arizona doesn't require sellers to disclose if someone died in the home — including violent deaths. This surprises buyers from states with mandatory death disclosure. If it matters to you, ask directly or check county records, because your agent and the seller have no legal obligation to volunteer it.

The bigger financial gotcha is summer cooling costs. A 2,000 sq ft home in Phoenix runs $300-$400/month for electricity June through September. That's not a typo. The AC runs nearly 24 hours. Budget for it — it's effectively a second mortgage payment for four months. Tucson is slightly better because of the elevation (2,400 ft vs Phoenix at 1,100 ft), but still hot.

Water is the long-term concern. Arizona relies on the Colorado River allocation and groundwater, both under stress. New developments in some areas can't get assured water supply designations. If you're buying new construction outside established water districts, verify the 100-year assured water supply certificate exists. Homes without it may face resale challenges.