How Cities Are Helping First-Time Buyers Unlock Homeownership

December 4, 2025

Buying your first home ca n feel overwhelming, no matter where you live. Between figuring out whether you qualify, navigating mortgage requirements, saving for a down payment, and trying to understand loans themselves, many would-be buyers get stuck before they even start. The good news is that cities, counties, states, banks, and nonprofits offer programs designed to make homeownership more attainable.

A good first step is understanding who counts as a first-time homebuyer. While it sounds like someone purchasing their very first home, the federal definition is much broader.

“All first-time buyer means is that you haven’t owned a home during the past three years,” Harold Perkins of Galaxy Lending said. “You can be a first-time homebuyer several times over the course of your life.” There are also exceptions for certain life circumstances – even if you previously owned a property, you may still be eligible.

Another key point: don’t let student loans stop you from exploring your options. Lenders focus on the minimum monthly payment – not the total balance – when determining whether the debt-to-income ratio works. Even deferred loans that lack a current payment can be counted if they meet a formula-based estimate. In practice, student loans often function like any other payment, such as a car loan or credit card.

Across the country, one of the best places to find assistance is your local city or housing nonprofit. Phoenix offers some strong examples of what municipal support can look like.

Meet the four currently available programs in Phoenix.

Phoenix has developed several well-established programs that create different pathways into homeownership. Although these are Phoenix-specific, similar programs exist in cities nationwide, and many of the nonprofits operating in the Valley have long-standing national roots.

Launched in 2013, Open Doors provides help with down payment and closing costs. This boost often represents the difference between continuing to rent and transitioning into ownership. Applicants begin the process before going under contract and work with partner nonprofits Trellis or Chicanos Por La Causa (CPLC) to complete the approval steps.
Since 2008, Section 32 has acquired HUD-owned or foreclosed homes, renovated them, and offered them at below-market prices. Homes are listed on the MLS, and buyers work directly with licensed real estate agents to handle application documents and standard purchase steps.
Created in 2019, Section 18 also offers renovated, affordable homes, focusing on areas where ownership can help stabilize and uplift neighborhoods. Contract approvals typically take around 14 days, and closings usually wrap within 45 days.
Phoenix partners with Newtown Community Development Corporation to help buyers purchase a home while the land beneath remains in trust, reducing overall costs and preserving long-term affordability. Some Community Land Trust (CLT) homeowners may also qualify for Newtown’s zero-interest repair loan fund, allowing repairs to be paid up front and repaid over time.

“Across all programs, income limits are common. They are typically based on household size and often fall under 80 percent of the Area Median Income (AMI). However, some allow up to 120 percent of AMI,” Jonathan Miller of Fathom Realty Elite said.

The Valley’s offerings represent just one part of a larger national network of assistance.

Nonprofits such as Trellis, Chicanos por la Causa, Newtown, and Guadalupe CDC have long offered education, counseling, and down-payment support. Banks also participate, including the Federal Home Loan Bank’s popular WISH Program, which provides a 4-to-1 grant match.

“For example, when a buyer contributes $8,000, the program adds $32,000 – fully forgivable over five years, ” Miller said. “Due to popularity, some programs have waitlists when funding cycles reset. Once approved and under contract, many programs move between 45 and 60 days, though specifics vary.”

CLT homes may involve additional waiting periods, as buyers must wait for a property that meets their needs. But once matched, the purchase timeline resembles a standard home sale.

Fifty-year mortgages: true or false?

The Wall Street Journal recently published an article that referenced 50-year mortgages. As of right now, they’re not a thing. The U.S. administration floated this idea as a way of making homeownership more affordable – and according to Perkins, this idea has many flaws.

The most glaring flaw is that, on a $400,000 mortgage, extending the term to 50 years would add another $400,000 in interest compared to a 30-year amortization. The difference in monthly payments is only $300. For a relatively small savings, a homeowner is doubling the amount they would owe on a house.

“A homeowner with a 50-year mortgage would be accruing interest at a rate higher than the expected appreciation rate of the house because in an amortization, the majority of a monthly payment is interest in the beginning of a loan,” Perkins said. “By extending the term to 50 years, it would take 40 years before the principal part of the payment was equal to the interest part of the payment.”

With no significant principal reduction until year 40 of a 50-year mortgage, homeowners would be less likely to sell because they don’t have equity.

“All of this assumes that the interest rate for a 50-year mortgage would be the same as 30 30-year mortgage. It will not. We already see that shorter-term loans have better interest rates,” Perkins said.

The biggest reason we would see a higher interest rate on 50-year mortgages is that current laws do not provide lenders with any protections when they fund 50-year loans. Current laws consider any mortgage with a term other than 30 years a Non-Qualified Mortgage. That means that the loan does not meet current lending standards.

The proof is in the pudding.

Since 2013, Open Doors has helped 100 households with more than $1.6 million in down payment and closing cost assistance. Section 32 has helped 239 homebuyers since 2008, providing more than $8.8 million in forgivable loans.

Section 18 has already helped 92 households purchase homes since 2019. Through the CLT partnership with Newtown, 14 homes have been sold since 2023, and Newtown’s larger community trust program has produced more than 135 affordable home sales overall.

“The number one thing we ask homeowners to do is compare all options, and then you can decide which one makes the most sense,” Perkins said.

If you’re thinking about taking the leap into homeownership, Phoenix offers a few helpful ways to make it happen. These are ongoing efforts designed to help everyday residents become long-term homeowners and community members. For more information, visit phoenix.gov.

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