First time home buyers in California have a variety of mortgage and down payment assistance programs to choose from for home buying assistance. The California Housing Finance Agency offers low interest rate mortgage loan programs and down payment assistance programs to those Californians who qualify and who are eligible.
Home Buyer Mortgage Loan Programs In California
The California Housing Finance Agency (CalHFA) offers home loan programs and down payment assistance to eligible first time home buyers in the State of California who need home buyer assistance.
The following is a brief summary of the First Mortgage Loan Programs Offered by CalHFA:
- CalHFA Conventional Loans – This loan program offers up to 95% financing with a low, competitive, affordable fixed interest rate to eligible first time home buyers. To qualify for this loan, home buyers will have to apply for the mortgage with a participating lender. Home buyers must meet income limits depending on where they are buying their home and their household size. Home buyer education is required for this program. There are also purchase price limits depending on the county where the home is located.
- Government Insured Guaranteed Mortgage – This program is similar to the Conventional Loan program just presented, but the loans in this category are FHA, VA, and USDA Rural Development mortgages. This means that government underwriting requirements apply. Typically, these mortgage programs are more flexible and they allow up to 100% financing. Income and purchase price limits apply. You must apply with a participating lender to be offered the competitive program interest rates and fees from CalHFA.
- CalHFA Community Stabilization Home Loan Program - This is a conventional first mortgage product that features a below market 30 year fixed rate, fully amortized loan for Real Estate Owned or REO property of participating financial institutions. You can borrow up to 100% of the home’s value and may be used with CalHFA’s CHDAP and Fannie Mae eligible Community Seconds programs.
Down Payment Assistance Programs In California
- Affordable Housing Partnership Program or AHPP - There is a joint effort by CalHFA and cities, counties, redevelopment agencies and housing authorities whereby a deferred payment subordinate loan from a locality is utilized by the first time homebuyer to assist them with a down payment and/or settlement and closing costs.
- Extra Credit Teacher Home Purchase Program ECTP - This is a low interest rate CalHFA first mortgage, together with a forgivable interest CalHFA junior loan to help eligible teachers get into affordable housing. The amount of assistance is not to exceed the greater of 3% of the sales price or $7500 or a sum not to exceed the greater of 3% or $15,000 of the sale price in CalHFA – defined high cost areas.
- California Homebuyer’s Downpayment Assistance Program CHDAP - This is a deferred payment junior loan that would be the lesser of three percent of the appraised value or purchase price. CalHFA will allow buyers to use other CalHFA approved DPA loans or grants to assist in the home purchase. The only exception is the ECTP. Payments are deferred for the life of the loan. This program is for first time home buyers only. Second homes and investment property are not qualified for this program.
- School Facility Fee Down Payment Assistance Program - This program is designed to provide qualified buyers with help to purchase new construction homes. Eligible prospects receive a conditional grant that is base on either a partial or full rebate of the school facility fess that is paid by the builder. The buyer shall have the option to use the assistance for closing costs, down payment or any other fees that can be associated with the buyers first mortgage loan. The mortgage insurer and mortgage lender still have to sign off on it.
Housing Assistance After The Sale Of A Home In California – Free Money
You have probably heard of the term Section 8. Section 8 housing vouchers have typically been for rental assistance from the government. In California you can get assistance with being a home owner. This would be in lieu of receiving Section 8 rental vouchers obviously. The Section 8 Housing Choice Voucher Program enables qualified first time buyers to receive a monthly assistance check for homeownership expenses.
HUD has authorized states and Public Housing Authorities (PHA’s) to provide assistance using funds available through the Section 8 rental voucher program. The Public Housing Authorities may choose to participate in offering the Section 8 for homeownership but are not necessarily required to do so. The program states at least 30% of the eligible homebuyers income will go towards paying the homeownership expenses with Section 8 to cover the remainder.
The first question to ask your mortgage broker is if they are qualified to originate the state sponsored loan programs. You do not want to waste your time trying to get a mortgage. You will have enough to worry about in buying your first home. If you do not qualify for any of these programs do not fret. You may be able to qualify for a government FHA loan. FHA loans make it very easy to qualify for first time home buyers. You can have a seller pay for your closing costs. The only thing that you would need to do is to come up with 3% down. You could have a family member gift you the 3% down payment. So theoretically you could get into a home for no money down and no money out of pocket.
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