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2022 California First-Time Homebuyer Programs

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California first-time homebuyers looking for financing and homebuying initiatives have many options. The Golden State has affordable mortgage programs, down payment assistance and closing cost help. To qualify, residents must meet credit and income requirements and additional program guidelines.

Learn more about first-time homebuyer programs in California.

California statewide and local first-time homebuyer programs

The California Housing Finance Agency (CalHFA) offers multiple homebuyer programs throughout the state. Through these initiatives, homebuyers can secure financing and assistance with their down payment and closing costs. Eligible applicants can combine programs to increase their home affordability. In addition to CalHFA’s programs, residents may qualify for local and regional California first-time homebuyer programs.

Program nameAssistance amountAssistance typeWhere it’s available
CalHFA ConventionalUp to $647,200 loan amount, depending on county (and up to $970,800 in some areas)30-year fixed-rate mortgageStatewide
CalHFA Government Loan programsUp to $970,800 loan amount, depending on mortgage type and county30-year fixed-rate mortgageStatewide
CalPLUS Conventional2% or 3% of loan amount for closing cost assistance30-year fixed-rate conventional mortgage with 0% interest second mortgage (Zero Interest Program [ZIP])Statewide
CalPLUS FHA2% or 3% of loan amount for closing cost assistance30-year fixed-rate FHA mortgage with 0% interest second mortgage (Zero Interest Program [ZIP])Statewide
MyHome Assistance Program3% or 3.5% of the purchase price up to $15,000 in down payment or closing cost assistance (eligible borrowers can exceed the cap)30-year second mortgageStatewide

What to know about different types of down payment assistance

Down payment and closing cost assistance can come in different forms. Applicants should know how each program works before applying.

  • Second mortgages. Also called a junior loan, ​​a second mortgage is an additional loan on top of your first mortgage. Some may have 0% interest and deferred payments, meaning they aren’t due until you sell or refinance the home. Other second mortgages may be forgivable if borrowers remain in the house for a set time, while others may have interest and traditional payments.
  • Grants. Some programs offer down payment assistance grants. Applicants do not need to repay grant money.

How California first-time homebuyer programs work

Buyers interested in applying to one of CalHFA’s programs can expect to take the steps outlined below. Applicants to local or regional programs will need to follow each program’s application process.

1. Explore available programs. Learn about the various programs available. Be sure to review the income limits of each to get an idea of which initiatives you qualify for. In addition to CalHFA’s programs, applicants should look into local and regional homebuyer programs.

2. Gather financial information and documents. Your lender will let you know the specific documents they need. However, preparing your recent tax returns, pay stubs, bank statements and employment history before contacting a lender can help the process go smoothly.

3. Contact a CalHFA participating lender. To apply for a program and get prequalified for a mortgage, contact a CalHFA preferred loan officer or participating lender in your area.

4. Attend a homebuyer education course. First-time homebuyers applying to one of CalHFA’s programs will need to take a homebuyer education course online or in person through NeighborWorks America or an HUD-approved housing counseling agency.

5. Be aware of program guidelines. Before accepting assistance and closing on your home, make sure you understand any program stipulations you must meet, such as remaining in the house for a set time.

California first-time homebuyer program requirements

Borrowers must meet program guidelines and the minimum mortgage requirements for the loan they’re applying for. Some lenders may set additional qualifications.

Program name Credit score minimumDTI ratio maximumMaximum income limitHow long you have to live in the home
CalHFA Conventional660 or 680, depending on income45%$139,000 to $248,000N/A
CalHFA Government Loan programs64045%$139,000 to $248,000N/A
CalPLUS Conventional660 or 680, depending on income45%$139,000 to $248,000N/A
CalPLUS FHA64045%$139,000 to $248,000N/A
MyHome Assistance Program640, 660 or 680 (depending on the first mortgage)45%$139,000 to $248,000N/A

THINGS YOU SHOULD KNOW

CalHFA’s programs and many local down payment assistance initiatives are available to borrowers who fall within income limits. The U.S. Department of Housing and Urban Development (HUD) establishes these limits and bases them on a county’s median income. As you review first-time homebuyer programs in California, familiarize yourself with the income limits in your area.

National first-time homebuyer programs

In addition to state programs, first-time buyers can secure home loans through national mortgage programs. While these loans aren’t all limited to first-time homebuyers, many feature low down payment minimums, flexible credit requirements and other favorable terms. Some down payment assistance programs require that applicants qualify for one of these nationally available loans.

Conventional loans. Typically, conventional loans (non-government) are harder to qualify for and have a 5% minimum down payment (or 20% to avoid paying private mortgage insurance). But two conventional loan programs, Fannie Mae’s HomeReady® and Freddie Mac’s Home Possible®, have 3% minimum down payments and lenient requirements. Borrowers must fall within program income limits to qualify. Freddie Mac’s HomeOne also has a 3% minimum down payment and is available to first-time buyers and those who haven’t owned a home in the past three years, regardless of income.

FHA loans. The Federal Housing Administration guarantees FHA loans, which are easier to qualify for than other loan types. The minimum down payment is only 3.5%, and borrowers are eligible with scores as low as 580 — or 500 if they put 10% down. Homebuyers will pay monthly mortgage insurance and an upfront mortgage insurance premium.

VA loans. Active-duty service members, veterans and eligible spouses can purchase a home with no money down with a loan from the U.S. Department of Veterans Affairs (VA). VA loans do not have monthly mortgage insurance, but borrowers pay an upfront funding fee.

USDA loans. Low- and moderate-income homebuyers who live in rural areas may qualify for a loan from the U.S. Department of Agriculture. USDA loans have no down payment requirement.

FAQs about California’s first-time homebuyer programs

Who qualifies as a first-time homebuyer in California?

The term first-time homebuyer includes applicants who have not owned their primary residence in the past three years. Keep in mind not all of CalHFA’s programs are limited to first-time homebuyers.

Can I qualify for down payment assistance in California?

CalHFA’s MyHome Assistance Program offers down payment assistance to first-time homebuyers who meet income requirements and are financing their home through one of the agency’s loan programs. Regional housing authorities, local governments and community organizations may have additional down payment assistance programs. Local programs are usually subject to fund availability.

How much of a down payment do I need to buy a house in California?

It’s possible to purchase a home with no money down in California. Both VA and USDA loans have no down payment requirements for eligible borrowers. And other loan options, such as some conventional loans and FHA loans, have down payments minimums ranging between 3% and 3.5%. Qualified applicants can combine down payment and closing cost assistance with these mortgages to reduce out-of-pocket expenses.

Home price trends in California’s major areas

California home prices rose throughout the state in 2021, as they did across the U.S. In the Sacramento area, median home prices rose 13.3% from the prior year. The median home price in Sacramento County is $459,373, which results in a $158 increase of the typical mortgage compared to a year ago. In El Dorado County, the median home price is $590,992, and the typical mortgage payment there is $204 higher than a year ago.

Home price increases in Los Angeles County were less steep at 10%. The current median home price there is $729,120, and the typical mortgage payment rose $176 from a year ago, according to the National Association of Realtors.

San Francisco County actually showed a 1.6% home price decrease year-over-year in Q2 2021, but the median price is still quite steep at $1,179,676. The typical monthly mortgage payment is $4,476, down from $4,537 a year before.

 

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