Unlocking the Dream of Homeownership in California
The Struggle is Real: High Home Prices in California
California’s soaring home prices have made it increasingly difficult for first-time home buyers to save for the initial costs of buying a home. However, there is hope. The California Housing Finance Agency (CalHFA) offers several programs designed to help bridge the gap and make homeownership a reality for low-to-moderate-income buyers.
Who Offers California First-Time Home Buyer Programs?
The California Housing Finance Agency (CalHFA) is a state-chartered organization that has been providing affordable mortgage loans and valuable closing cost and down payment assistance to low-to-moderate-income home buyers since 1975. Additionally, local government agencies at the county level may also offer first-time home buyer programs.
Types of California First-Time Home Buyer Programs
CalHFA offers several first mortgage loan programs for both conventional and government-backed loans. These programs provide 30-year fixed-rate mortgages with competitive market prices. The real benefit lies in the access they give to CalHFA’s closing cost and down payment assistance programs.
Down Payment and Closing Cost Assistance Programs
These programs offer up to 20% of the home’s sales price in assistance, which can be tens of thousands of dollars in California’s expensive real estate market. To qualify, first-time home buyers must attend an eight-hour home buyer education course.
- My Home Assistance Program: Provides up to 3.5% of the home’s appraised value or sales price for CalHFA FHA loans, and up to 3% for CalHFA VA, USDA, and conventional loans.
- Zero Interest Program (ZIP): Offers an interest-free, deferred payment second mortgage worth up to 3% of the first mortgage amount, exclusively for closing costs.
- Dream for All Program: A special type of loan that provides up to 20% of the home’s sales price or appraised value, up to $150,000, with a unique structure, extra eligibility requirements, and extra savings.
First Mortgage Programs
CalHFA offers several first mortgage loan programs, including:
- CalHFA FHA Loan Program: A 30-year fixed-rate FHA loan with access to the My Home assistance program.
- CalHFA VA Loan Program: A 30-year fixed-rate VA Loan for eligible service members, veterans, and surviving spouses.
- CalHFA USDA Loan Program: A 30-year fixed-rate mortgage reserved for low- and moderate-income home buyers in eligible rural areas.
- CalHFA Conventional Loan Program: A 30-year fixed-rate mortgage loan with access to the My Home Assistance program.
- CalPLUS Program: A program that allows first-time home buyers to access the ZIP program to save on closing costs.
Eligibility Requirements
To qualify for CalHFA programs, your income must be below the limit for the county where you’d like to buy the home. Other key measurements include credit score, debt-to-income ratio, loan-to-value ratio, and sales price.
How to Apply for CalHFA First-Time Home Buyer Programs
To apply, find a CalHFA-approved loan officer who can walk you through the process. Be prepared to provide necessary documents, such as pay stubs, bank statements, employment history, and previous tax returns.
Frequently Asked Questions
- Do I qualify for a CalHFA program?: Check your income limit and eligibility requirements to see if you qualify.
- How much assistance can I receive?: Up to 20% of the home’s sales price or appraised value, up to $150,000, through the Dream for All program.
- Do I need a down payment?: Not necessarily, depending on the loan program you choose and your eligibility for down payment assistance.
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