Do you want to buy a home but you don’t have enough money saved for the down payment yet? Good news for you – here are 3 of the most common buyer-assist programs you can look into that make it easier to purchase a home in California.
Loan Programs to Assist Downpayment
CalFHA
The California Housing Finance Agency (CalFHA) helps create and finance progressive housing solutions so more Californians have a place to call home. CalFHA offers several options for a downpayment and closing cost assistance. The payments on this loan are deferred so you do not have to make a payment on this assistance until your home is sold, refinanced, or paid in full. This helps to keep your monthly mortgage payment affordable. Home assistance programs they offer are:
- CalHFA Government Loans (FHA): MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $15,000.
- CalHFA Conventional Loans: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $15,000.
Borrower Requirements
- Be a first-time homebuyer. See the definition of a first-time homebuyer.
- Occupy the property as a primary residence; non-occupant co-borrowers are not allowed.
- CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.
Property Requirements
- Be a single-family, one-unit residence, including approved condominium/PUDs
- Guest houses, granny units, and in-law quarters may be eligible
- Manufactured housing is permitted
- Condominiums must meet the guidelines of the first mortgage
Go to the CalHFA website to find out if you’re eligible.
USDA Home Loan Programs
The U.S. Department of Agriculture offers this program that is designed for people who are looking into settling in rural communities. The beauty of this program is that it is 100% financing, meaning zero down payment is needed. Home loans can be as high as $500,000 or more in pricey real estate markets like California.
Borrower Requirements
- Meet income-eligibility (cannot exceed 115% of median household income)
- Agree to personally occupy the dwelling as their primary residence
- Be a U.S. Citizen, U.S. non-citizen national, or Qualified Alien
- An acceptable credit history, with no accounts converted to collections within the last 12 months, among other criteria. If you can prove that your credit was affected by circumstances that were temporary or outside of your control, including a medical emergency, you may still qualify.
Property Requirements
- Must be owner-occupied primary residences
- Property must be 2,000 square feet or less, with a market value below the area loan limit.
Go to the USDA website to find out if you’re eligible.
Golden State Finance Authority Program
The Golden State Finance Authority (GSFA) is a local housing finance authority that provides homeownership programs that are available for purchase or refinance of a primary residence anywhere in California and there is no first-time homebuyer requirement to qualify:
- GSFA Platinum®: Provides financial assistance of up to 5%, to use for the down payment and/or closing costs. This is provided as a zero percent Second Mortgage, meaning it accrues no interest, has no monthly payments, and is completely forgiven after three (3) years from the close of escrow. For qualifying homebuyers, the assistance is provided as a gift, that never has to be repaid.
- GSFA OpenDoors®: Provides financial assistance of up to 7%, to use for the down payment and/or closing costs. Has a 30-year term and a zero percent note rate. Any down payment assistance provided as a gift does not have to be repaid.
Borrower Requirements
- The borrower must meet income eligibility.
- Property being purchased must be used as a primary residence.
- Credit score: at least 640 FICO
- The maximum debt-to-income is 45%.
Property Requirements
- Can be used to buy both new and existing homes, as long as it is the applicant’s primary residence.
Go to the GSFA website to find out if you’re eligible.
It is possible to buy a home with little to no money out-of-pocket! Down payment money shouldn’t be a drawback. If you’re ready to buy a home in San Diego county, we’d be more than happy to help. Just let us know.
Sources: CalFHA, USDA, Golden State Finance Authority
