There is assistance available for those trapped in the gap yet willing to persevere.
Homes for Arizonans, a lending assistance program through the Arizona Housing Commission, provides loans to prospective homebuyers who can qualify to buy a home through a lender.
"We come in at the end, after all other funds are used," said Sandra Weis, Homes for Arizonans program specialist. "We handle ‘gap' financing.
"For example, a family can go with U.S. Department of Agriculture Rural Housing, gifts from family, 401K and so forth, then if they don't have enough, our funds can kick in too."
A maximum of $20,000 per family may be granted based on income (wages in a four person household cannot exceed $63,135), purchase price of home, closing costs, savings, assets and gifts.
"The first mortgage amount should be no less than 80 percent loan-to-value. Debt ratios may be no more than 33 to 41 percent," she said.
The home must be the family's primary residence.
If the family chooses to rent or sell the home, the no-interest loan must then be repaid.
The state uses the money to continue funding the program.
"Educating families on how to own a home is my passion," Weis said. She periodically gives Homes for Arizonans seminars in Payson.
For more information, visit www.housingaz.com or call (602) 771-1027.
"There's no reason something couldn't happen in Payson. It's an eligible area," said Earl Tatlow, single family housing specialist with the US Department of Agriculture's Rural Housing Program.
The guaranteed loan program assists moderate income families who can afford market interest rates, but have insufficient savings for a down payment.
There is a direct loan program for low-income qualifiers.
A credit score of 660 or better is preferred.
A detailed example of what it takes to qualify is located at http://www.rurdev.usda.gov/az/GLoans.htm.
The Prescott Valley office serves the Payson area. Call (928) 759-9301.