At about 3.30pm on Tuesday, police were called to Wattle Way in Albury over reports of a man with a weapon.
The man fled from police, jumping a fence in Fern Place.
A short time later, police arrested a 20-year-old man at a home in Jacaranda Street.
Police allegedly found a backpack that contained a homemade gun, ammunition, and housebreaking implements.
They also allegedly recovered a number of items reported as stolen.
The man was charged with firearm and property offences and appeared in court yesterday.