First-time homebuyer grants and loans in California

First-time homebuyers in California have a lot to help them get into homeownership. Here is a summary of CalHFA and government plans that can give you a hand in owning a first home.

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Who are first-time buyers in CA?

Although it may not seem like it, being a first-time homebuyer is a more flexible classification than you might think. In California and the rest of the United States, a first-time buyer, in addition to one who has never owned a home, also applies for the following scenarios, as defined by the Department of Housing and Urban Development (HUD):

• Not having owned a home within the last 3 years.
• Never having been a homeowner, even if a spouse has been a homeowner.
• A single parent who has owned a home with an ex-spouse.
• A separated homemaker who had only been a homeowner with her ex-husband.

First-time homebuyer assistance in California

The California Housing Finance Agency (CalHFA) is responsible for offering conventional and government-backed mortgages for first-time homebuyers.

Most plans provide closing and down payment assistance, require a minimum score of 580, depending on certain limits, and you must meet minimum income requirements.

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These programs in California can be used to buy a single-family home, a condominium, a manufactured home, a unit in a housing development and even greenhouses.

There are 8 plans that CalHFA offers to California first-time homebuyers:

• CalHFA VA Credit. This program is for veterans of the armed forces who show a valid certificate of eligibility. It is a 30-year fixed mortgage that has a minimum score requirement of 620 and no insurance to pay after closing. If you qualify, you will most likely have no down payment.
• CalHFA FHA loan. This financing can be combined with a down payment assistance program. It is a 30-year fixed mortgage with a minimum down payment of 3.5% and you need at least a 580 score. The only disadvantage is that you are committed to PMI until you finish paying.
• USDA CalHFA Credit. This option has the possibility of a 0% down payment and is designed for people with low-middle income who want a home in a rural area. It is a 30-year fixed mortgage with a more stringent income limit than CalHFA, low rates for insurance, and you can combine it with the MyHome plan to finance the down payment.
• CalPlus HFA Loan. This 30-year mortgage has a slightly higher interest rate than the CalHFA FHA mentioned above. You can combine this plan with the Zero Interest program that relieves you of the burden of closing costs.
• Conventional CalHFA credit. Unlike the government-backed one, this 30-year mortgage requires you to purchase private insurance. As with the federal version, you have to meet the minimum requirements.
• Conventional CalPlus loan. Similar to the government-backed version, this 30-year mortgage has a higher interest rate than the government-backed version. Another difference is that it is paired with a 0% interest junior loan with which you can get up to 3% of the principal loan for closing costs.
• MyHome down payment assistance. This program works with government and CalHFA mortgages. Those using government loans can apply for subordinate financing of up to 3.5% of the appraised value to finance the down payment or closing costs. The payments are deferred until you sell, refinance or pay off the mortgage. With conventional plans you get 3% and the rest is the same.
• Forgivable equity builder loan. This forgivable loan is designed for first-time homebuyers in California who qualify. It is distinguished by giving you up to 10% of the appraised value of the property to pay the down payment. If you use the home as your primary home for 5 years, the debt is forgiven. The income condition is that you earn less than 80% of the county median income.

First-time homebuyer grants and loans in California allow you to become a homeowner with little money from your savings. They are programs that let you use gifts and down payment assistance or closing costs. Finally, remember that CalHFA eligibility depends on the 8-hour online orientation course.

It is not surprising that the government continues to promote this type of assistance in California, since in this state real estate prices are higher than in most states in the country. That is why it would be important for you to be able to take advantage of programs that make it easier to become a homeowner.

Español: Ayudas para primeros compradores de casa en California