This article is an update of a previous article.
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.
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.
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 to be used for down payment or closing costs. It may be combined with CalHFA or non-CalHFA fixed-rate, first mortgage loan. Payments are deferred for the life of the loan. This program is for first time home buyers only. Homebuyer education is required for all borrowers.
HUD – Section 8 Housing Choice Voucher Program
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.