First-time homebuyer programs and grants in California

Quick insights

• First-time homebuyer programs in California may provide down payment, closing cost and renovation assistance to help buyers overcome financial barriers.
• Meeting eligibility requirements, such as income limits and homebuyer education completion, is essential to qualify for these programs.
• Consulting with a Home Lending Advisor can help buyers understand loan options, interest rates and repayment terms, ensuring they choose a program that fits their financial situation.

Buying your first home in California can feel both thrilling and overwhelming, especially with soaring home prices and upfront costs. Take Mia, for example–she had a steady job and excellent credit but struggled to save enough for a down payment while paying rent. Just when she thought homeownership was out of reach, she discovered first-time homebuyer programs that made all the difference. These programs can provide financial assistance, lower interest rates and educational resources to help you get the keys to your dream home.

Understanding first-time homebuyer programs in California

California offers several programs to help first-time homebuyers navigate the challenges of purchasing a home. These programs are primarily offered by the California Housing Finance Agency (CalHFA), which provides financial support and other benefits to make homeownership more affordable.

Types of first-time homebuyer programs:

• Down payment assistance: Helps cover the upfront cost of a down payment.
• Closing cost assistance: Reduces out-of-pocket expenses at closing.
• Renovation loans: Provides funds for home improvement in addition to the mortgage.

Potential benefits of these programs:

• Lower interest rates: Many first-time homebuyer programs offer below-market rates.
• Deferred payments: Some loans don’t require payment until you sell or refinance.refinance-hl000061
• Combinability: Many programs can be combined with grants and other assistance to maximize savings.

Eligibility:

• Income limits based on location and household size.
• Home price limits are set by each program.
• Must be a first-time homebuyer (typically defined as someone who hasn’t owned a home in the past three years).

Down payment assistance in California

One of the biggest barriers to homeownership is saving for a down payment, but California offers multiple programs to help:

• CalPLUS FHA Program: The CalPLUS FHA program is an FHA-insured first mortgage with a slightly higher 30-year fixed interest rate than the standard FHA program and is combined with the CalHFA Zero Interest Program (ZIP) for closing costs.
• CalHFA government loans:This loan is part of the MyHome Assistance Program. This loan provides a deferred-payment junior loan of 3.5% of the purchase price or appraised value to help with the down payment and/or closing costs.
• CalHFA conventional loans:This loan is part of the MyHome Assistance Program. This loan offers a deferred-payment junior loan of up to 3% of the purchase price or appraised value, whichever is lower, to assist with down payment and/or closing costs.
• Golden State Finance Authority (GSFA) Platinum Program:Provides homebuyers with down payment assistance of up to 5.5% of the loan amount, which can be used for down payment or closing costs. This program is available for first-time and repeat homebuyers.
• Homebuyer education requirement: To qualify for any CalHFA loan program, first-time homebuyers must complete a homebuyer education course from an approved provider, such as eHome America or a HUD-approved housing counseling agency.

Closing cost assistance programs in California

In addition to down payment assistance, first-time homebuyers in California can also benefit from programs that help cover a portion or all of their closing costs.

• California Homebuyer Downpayment Assistance Program (CHDAP): Offers a deferred-payment junior loan that can be used to cover closing costs, reducing out-of-pocket expenses for buyers.
• Extra Credit Teacher Home Purchase Program (ECTP): Provides a deferred-payment junior loan for eligible school employees, including teachers and administrators, to be used for down payment assistance and/or closing costs with an eligible CalHFA first mortgage loan.
• Program combinability: These programs can be combined with a CalHFA first mortgage to increase affordability.
• Eligibility requirements: Applicants must be first-time homebuyers and complete a homebuyer education course to qualify.

Renovation assistance programs

For first-time homebuyers looking to purchase a home that needs potential upgrades, California offers renovation assistance programs to help cover improvements costs:

• Cal-EEM + Grant program: Combines an FHA-insured Energy Efficient Mortgage with an additional Cal-EEM Grant, providing extra funds for energy-efficient home improvements.
• Benefits of the program: Financing for energy efficient upgrades such as insulation, solar panels or HVAC systems. Potential for lower utility bills and increased home value.
• Eligibility requirements: The property must be used as a primary residence. Applicants must obtain a Home Energy Rating System (HERS) report to assess energy efficiency needs.

This program may make it easier for first-time homebuyers looking to invest in a home while improving its long-term affordability and sustainability.

Applying to first-time homebuyer programs in California

Navigating the application process for these programs requires preparation and understanding of key steps:

• Application process: Complete a homebuyer education course from an approved provider. Work with a participating lender who specializes in first-time homebuyer programs.
• Importance of understanding program terms: Be aware of loan repayment terms, deferred payments and shared appreciation agreements. Review income and home price limits to ensure eligibility.
• Tips for a strong application: Gather necessary documentation, such as proof of income, tax returns and bank statements. Check and improve credit score to potentially qualify for better loan terms.

In summary

First-time homebuyer programs in California can provide valuable opportunities to make homeownership more affordable. Assistance could be provided for down payments, closing costs and renovations. Understanding eligibility requirements and the application process is important. By taking advantage of state-specific programs and speaking with a Home Lending Advisor, homebuyers can navigate the process with confidence.