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Down Payment Assistance for CA Homebuyers

Coming up with the cash to purchase a home can be one of the largest hurdles for first-time homebuyers.  But for those with low to moderate income, saving for a down payment could take even longer – especially in California.  That’s why the California Housing Financing Agency offers a variety of down payment assistance options that can make your dream of homeownership a reality.

“For more than 35 years, the California Housing Finance Agency (CalHFA) has supported the needs of renters and homebuyers by providing financing and programs that create safe, decent and affordable housing opportunities for low to moderate income Californians.  Established in 1975, CalHFA was chartered as the State’s affordable housing bank to make low interest rate loans through the sale of tax-exempt bonds. CalHFA is a completely self-supporting State agency, and its bonds are repaid by revenues generated through mortgage loans, not taxpayer dollars.”

What is down payment assistance?  The type of down payment assistance offered through CalHFA is also called a second or subordinate loan.  They act as “silent seconds”, meaning 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.  In some cases, closing cost assistance and financing for home improvements are also available.  Visit CalHFA

EXTRA! EXTRA! CalHFA Introduces Additional Down Payment Assistance for First-Time Homebuyers.  CALHFA Makes Home Buying Process More Accessible! Read CalHFA’s full press release here

What type of programs are available and how do they work?  CalHFA offers down payment assistance for both Conventional and Government Insured loans.  If you’re unsure of the difference, keep in mind that both types of loans are designed for different borrowers.  Choosing a conventional loan over a government insured loan is largely based on one’s mortgage profile.  In other words, you choose what fits your situation.  Working with the right loan officer can help compare the advantages of each!

How each loan works is again based on your eligibility.  For instance, let’s say you’re qualified to purchase a home in Orange County and you’ve chosen to use the CalPlus Conventional Loan Program.  This is a 30-year, fixed-rate loan and is combined with the CalHFA Zero Interest down payment assistance program.  Yes, I said zero interest!  Using this program, you can borrow up to $417,000 for the first loan.   The zero interest down payment assistance allows you to borrow an additional 3%, of your first loan amount.  This is your second loan.  It is positioned behind your first loan and is used for your down payment.  Payment for this second loan is deferred until you sell, refinance or pay off your home.

Getting Started

Last month I had the opportunity to host an event with CalHFA specialist, LeAnne Walker.  She flew in from Sacramento to share with us how CalHFA’s down payment assistance programs have helped countless people purchase homes.  She also shared specifics regarding each program.  Not only is the opportunity tremendous, it’s easy for anyone to get started!

Down Payment Assistance in Targeted vs Non-targeted areas! There are benefits - Read More

Down Payment Assistance in Targeted vs. Non-targeted areas.  There are benefits!  Read More

First, you’ll need to determine eligibility.  Income limits, purchase price limits and homes in targeted areas are all governing factors.  It’s also important to remember that each county has set different limits.  For instance, the purchase price limits in Los Angeles are not the same as they are in Orange County.  The same is true for income.

That said, I encourage you to visit CalHFA and use their Eligibility Calculator.  I’d also urge you to seek guidance from a CalHFA loan officer for additional help.  We can help match your mortgage profile with the best suited down payment assistance program.  If there is anything I’ve learned in this business, it’s that an accurate review of one’s mortgage profile upfront can save buyers both money and heartache on the backend.

Once pre-qualified, it’s time for your homebuyer education course.  The course is available online and in person.  And, don’t worry, there’s no detention.  This course is designed to prepare you for homeownership success!

Finally, prepare your “needs and wants” list.  Are you looking for a two-bedroom or a three-bedroom?  How about a little view?  Whatever you decide, write it down.  It’s time to start shopping!

For a full list of available down payment assistance programs, visit CalHFA or contact me.

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