How Much Do I Need Saved to Buy a House in Arizona?

You need four separate piles of cash to buy your first home in Arizona: a down payment, closing costs, money spent before closing on earnest money and inspections, and whatever reserves your lender asks you to still have in the bank after the keys change hands. The down payment is the only one most first-time buyers plan for, and in Peoria, where the median sold price was $511,000 in June 2026 and homes were selling at 98.3% of asking price, the other three add up to real money. The good news is that Arizona runs a statewide down payment assistance program, Home Plus, that has no sunset date and does not require you to apply directly.

This post is about cash to close: the money that has to be in your accounts and documented before an Arizona escrow company will let you sign. It is not about what you can afford monthly, and it is not a loan comparison.

The four buckets of cash a first-time buyer needs

Every dollar you need falls into one of four categories, and lenders treat them differently.

• Your equity contribution at closing. The minimum depends on the loan program.
• Closing costs. Lender, title, escrow, and recording fees, plus prepaid taxes, insurance, and interest.
• Pre-closing spending. Earnest money, the appraisal, and inspections. Some of this is spent weeks before you close and some of it is never refunded.
• Reserves. Liquid or near-liquid assets you still have after closing. Reserves are separate from your down payment and closing costs, because those funds are spent to complete the purchase.

Mixing these together is the most common way first-time buyers under-save. A buyer who saves exactly the down payment shows up at the closing table short.

Down payment minimums: FHA, VA, and conventional

An FHA home loan is insured by the U.S. Department of Housing and Urban Development through the Federal Housing Administration, and because the government backs the loan, FHA-approved lenders take on less risk. FHA down payment thresholds are set by HUD under 24 CFR Part 203 and apply uniformly across all FHA-approved lenders. A credit score of 580 or higher qualifies for the minimum down payment. Scores between 500 and 579 require a larger down payment. Below 500, FHA does not insure the loan regardless of down payment. The HUD handbook sets the maximum loan-to-value for FHA purchase transactions at 96.5 percent of the adjusted value.

Two FHA details change the arithmetic. The down payment is calculated on the lesser of the purchase price or the appraised value, so if the appraisal comes in under your contract price, the percentage applies to the lower number. And FHA allows the upfront mortgage insurance premium to be financed into the loan instead of paid at closing. An FHA loan can only be used to finance a primary residence, and the home must be owner-occupied rather than an investment property or vacation home.

A VA loan is issued by a private lender and partially guaranteed by the U.S. Department of Veterans Affairs. The VA does not lend money directly. It guarantees a portion of the loan, which is what lets lenders offer no down payment and no PMI to eligible borrowers. In 2026 the VA guaranty has no loan limit for borrowers with full entitlement. Most VA purchase loans carry a one-time funding fee, a charge paid to the Department of Veterans Affairs and calculated as a percentage of the base loan amount, which most borrowers finance into the loan rather than pay in cash. The current funding fee rates took effect April 7, 2023 and remain unchanged for 2026.

Some borrowers pay no funding fee at all. Veterans receiving VA disability compensation are commonly exempt entirely, on every use, which is worth confirming on your Certificate of Eligibility before closing. Purple Heart recipients and surviving spouses receiving Dependency and Indemnity Compensation also do not pay it.

On the conventional side, first-time buyers can put down less than the standard minimum through Fannie Mae's HomeReady and Conventional 97 programs for primary residences. HomeReady allows the down payment to come from gifts or grants and carries reduced private mortgage insurance that can be canceled once you reach the equity threshold. Freddie Mac's equivalent is Home Possible, with the same low down payment, the same income cap, and reduced PMI. A first-time buyer is someone who had no ownership interest in a residential property during the three years before the purchase.

Gift funds can cover the entire FHA down payment, with one restriction

The full FHA minimum down payment can be gifted, meaning the borrower does not need to contribute personal funds. Eligible donors include family members, employers, labor unions, close friends with a documented relationship, and HUD-approved nonprofits.

The restriction matters more than the permission. The seller, the real estate agent, the builder, or any party who benefits financially from the transaction is a prohibited donor under the interested-party restriction. If you are counting on gift money, have that conversation with your lender before you write an offer, not after.

Closing costs in Maricopa County and what they include

Arizona is an escrow state, which means closings are handled by title and escrow companies rather than attorneys. Arizona does not impose a state real estate transfer tax and prohibits transfer taxes by statute under A.R.S. 11-1132. Only a flat Affidavit of Property Value fee is charged at recording. That single rule keeps Arizona closing costs below what buyers coming from states with transfer taxes are used to.

Your closing costs split into one-time costs and prepaids. One-time costs are the appraisal, inspections, lender fees, escrow and recording fees, and title insurance. Prepaids and reserves are property taxes, homeowner's insurance, and prepaid interest. Maricopa County charges per-document recording fees to record the deed and the deed of trust or mortgage.

Who pays what in Arizona follows local custom. Sellers typically pay for the owner's title policy while buyers cover the lender's policy. The escrow company acts as a neutral third party and escrow fees are usually split between buyer and seller. If you have a mortgage, the lender's title policy is required. An owner's title policy is optional but strongly recommended for your protection. Most buyers also pay for the appraisal, the credit report, and any flood certification or condo document review.

Three prepaid items are worth understanding before you pick a closing date. Property taxes are prorated at closing based on the closing date and Arizona's tax calendar. Your lender collects several months of property taxes upfront to fund the escrow impound account, and you pay a full year of homeowner's insurance upfront. Prepaid mortgage interest covers interest from your closing date to the end of that month, so closing earlier in the month means paying more and closing on the 28th means paying almost nothing. If you are tight on cash to close, ask your lender to model a late-month closing date.

On the lender side, an origination or application fee covers processing and underwriting and may be a flat fee or a percentage of the loan. Discount points are an optional upfront cost to buy down your interest rate, with one point equal to a set percentage of the loan amount. If you are a VA borrower, VA guidelines allow a seller to pay a capped share of the purchase price toward your concessions, which is one of the most underused tools in the program.

Published closing cost ranges for Arizona buyers exist as a percentage of purchase price, and the Consumer Financial Protection Bureau publishes a typical range as well. Ask your lender for a written Loan Estimate rather than working from a percentage. Within 3 business days after your loan application, your lender provides the Loan Estimate, and the lender must deliver the Closing Disclosure at least 3 business days before closing.

What you spend before you ever reach the closing table

The first check you write is earnest money, deposited into escrow per the contract once your offer is accepted. Earnest money is credited to your purchase at closing, so it is not an extra cost, but it does have to be liquid and available within days of an accepted offer. The amount depends on the specifics of the purchase.

A home inspection is advised but not required before you buy. In Arizona, the buyer typically has a 10-day period after the contract is first accepted to complete the inspection and other standard inquiries related to the suitability of the home. That window is short, and inspection money is spent whether or not you close.

Most buyers order more than one inspection. A general home inspection is standard, and buyers commonly add a roof inspection, a pool inspection where there is a pool, and a wood-destroying organism inspection for termites. Subterranean termites are common in Maricopa and Pinal counties, and a pest inspection is often required for VA loans. Your lender requires an appraisal to confirm the home is worth the purchase price, and appraisal cost varies with the property and scope, running higher on unusual or higher-end homes.

Budget inspection and appraisal money as spent, not as recoverable. If you walk during the inspection period, you generally get earnest money back under the contract terms and you do not get the inspection fees back.

Reserves: the cash the lender wants you to still have after closing

Reserves are measured by the number of months of the qualifying payment amount for the subject mortgage, based on PITIA, that a borrower could pay using their financial assets. PITIA stands for principal, interest, taxes, insurance, and association dues where they apply. Fannie Mae subtracts funds to close from available assets when considering whether assets are sufficient for reserves, so the money you spend at the closing table does not count.

There is no single reserve requirement for every borrower. The amount depends on the loan program, the property type, occupancy, the underwriting result, and how many financed properties you own. For manually underwritten conventional loans, minimum required reserves are documented in Fannie Mae's Eligibility Matrix, dated August 5, 2026, which also carries credit score and maximum debt-to-income requirements. For DU loan casefiles, Fannie Mae's Desktop Underwriter determines the reserve requirement.

For a standard one-unit primary residence, lenders often do not require any financial reserves, particularly when the loan is processed through automated underwriting. Fannie Mae guidelines typically require two months of PITIA for second homes and six months for investment properties. FHA follows a similar logic: one- and two-unit primary residences typically do not require reserves when the loan receives an acceptable automated underwriting result, manually underwritten one- and two-unit loans generally require at least one month of PITI, and three- and four-unit properties generally require at least three months of PITI. FHA policy is governed by HUD's Single Family Housing Policy Handbook 4000.1. Individual VA lenders frequently layer their own reserve requirements on top of the VA baseline.

One practical point that trips up buyers with generous relatives and side income: it is generally advisable to have assets in personal accounts seasoned for at least two months before you apply. Money that appears in your account the week you go under contract creates documentation work.

Arizona's Home Plus program reduces the cash you bring

Assistance comes as a forgivable second mortgage covering down payment and closing costs, and the second mortgage is fully forgiven after a set period. The program requires a 620 minimum FICO score, applies a statewide income cap, and requires at least one borrower to complete a home buyer education course before closing. The income limit in effect is dated April 6, 2026, and the Arizona IDA increased its 2026 Home Plus income limit.

Home Plus does not require a direct application from the homebuyer. You access it through a participating lender. It pairs with FHA, VA, USDA, and conventional first mortgages, and it offers reduced mortgage insurance premiums on conventional Fannie Mae and Freddie Mac loans. It also does not require you to be a first-time buyer, so repeat buyers who meet the income and other guidelines may qualify.

Two structural facts about Home Plus matter for planning. The program is self-funded through funds raised in the national capital markets and income generated from program operations, its funding is available throughout the year and is never exhausted, and it has no sunset date.

Arizona Is Home is the other Arizona IDA program, a collaboration between the Arizona Department of Housing and the Arizona IDA that pairs a below-market 30-year fixed-rate mortgage with down payment assistance for homebuyers at or below a share of area median income. It is not available in Pima County, Maricopa County, or Chino Valley. Peoria, Goodyear, Litchfield Park, Surprise, Avondale, Buckeye, Sun City, and Phoenix all sit in Maricopa County, so Arizona Is Home is off the table here and Home Plus is the program that applies. Arizona Is Home updates took effect July 1, 2026.

What the West Valley market means for your cash planning

Your savings target is a percentage of a purchase price, so the price you are shopping drives everything.

Days on market is the median time from listing to going under contract. Months of supply is how long it would take to sell every home currently listed at the current pace, and six months is generally considered balanced.

Avondale is the market in my coverage area with expanding inventory, up 8.8 months year over year, meaning compared with the same period a year earlier. At $421,990 median sold price and 64 days on market as of June 2026, a first-time buyer there has time to evaluate and negotiate, and FHA and VA eligibility is strong in that price range.

In a market at 98.3% of asking price in Peoria, plan your cash around paying close to list rather than around winning a discount. And if you are choosing between markets, note that inventory in Avondale is expanding while Peoria, Goodyear, Litchfield Park, and Vistancia are all tightening.

Where the data stops

A first-time buyer shopping under the Peoria median of $511,000 is shopping a slice of that market that is not separately reported.

On the cost side, closing cost, inspection, and earnest money figures in Arizona are published as ranges that depend on purchase price, property type, and lender. Your Loan Estimate is the only document that gives you your actual number.

The Bottom Line

Save for four things, not one. Your down payment follows the loan program, and VA borrowers with full entitlement can put nothing down while FHA borrowers at 580 or higher hit HUD's minimum under 24 CFR Part 203. Closing costs come on top, and Arizona's lack of a state transfer tax under A.R.S. 11-1132 keeps them lighter than in many states. Earnest money and inspections come out of pocket during a 10-day inspection period that starts as soon as your contract is accepted. Reserves are whatever your lender's underwriting says, and for a one-unit primary residence run through automated underwriting, often nothing. Home Plus is available statewide with no sunset date, requires a 620 FICO and a home buyer education course, does not require a direct application from you, and does not require you to be a first-time buyer.

If you want a written cash-to-close estimate for a specific price point in Peoria, Goodyear, Avondale, Surprise, Litchfield Park, Buckeye, Sun City, or Phoenix, reach out and I will walk you through the numbers with a lender before you start touring homes.

Written by Archie Dean, part of the Kristan Cole Network team.