The California Housing Finance Agency (CalHFA) has several homebuyer assistance programs that can help them get low-interest loans to purchase their first homes.
The down payment and closing costs may be covered by these programs, which may allow you to borrow up to 105% of the home’s value.
California Homebuyer Assistance Programs
By purchasing mortgages from its approved lenders, CalHFA aids in expanding access to credit for low- and moderate-income homebuyers. It has existed since 1975 and does not receive government funding.
The income requirements for CalHFA loans, however, are much higher. They varied from $159,000 in counties with lower costs, such as Fresno and Kern, to $300,000 in counties with higher costs, such as San Francisco, Santa Clara, and San Mateo, as of the middle of 2022.
You still won’t be approved unless you can comfortably afford the mortgage payment each month. The principal and interest payment on a CalHFA conventional loan of $700,000 at a 7% interest rate would be about $4,517 per month, as an example. Total monthly outlays for taxes, insurance, and mortgage insurance come to about $5,521.
CalHFA provides access to six distinct loan options. Both of these stipulations mandate that the home you purchase is your primary residence and that it be a single-family, distanced structure.
The first thing you need to know is that it is possible to purchase a home as a first-time homebuyer even if you have previously owned a home.
The only requirement is that you haven’t owned a home in the last three years. If you can come up with your own down payment and closing costs, you may qualify for most CalHFA loans.
Your annual income must be at or below the CalHFA-established income limit for the county in which you plan to purchase a home, regardless of the program you choose.
Homebuyer education and counseling through eHome or a HUD-approved housing counseling agency like NeighborWorks America or Habitat for Humanity are prerequisites for participation in CalFHA programs (in person or virtually). To help you budget for any unforeseen maintenance expenses after closing, a home warranty is required.
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Who Can Apply?
Teachers and first responders may be eligible for down payment assistance, and the program is not limited to first-time homebuyers.
Those who qualify to receive a 4% down payment are paid off early, there is no penalty. However, borrowers may be subject to paying back their down payment and closing cost assistance.
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