Did you know that there are some lenders and organizations that offer down payment assistance (DPA) programs? Most require you to be a first time homebuyer and they stipulate maximum income limitations per county and/or household size. But there can be some great options that can help you qualify with minimum down payment requirements, and of course afford more home since your payment would be based on a lesser amount borrowed. Each program has its own set of rules, requirements and interest rates, so call me to see how I can help.
In the coming weeks, I’m going to showcase a few DPA programs that are available. Today, I will highlight what is available by the California Housing Finance Agency (CalHFA). CalHFA is an affordable housing lender that provides both conventional and government loan programs to help you purchase a home in California. Some of its requirements are:
- minimum credit score of 680 is required if median income is above 80% of the county’s limit; 660 if at or below 80%
- income limits are found here
- must be a first time homebuyer purchasing a home as your primary residence
- must complete a homebuyer education course and receive a certificate of completion
- loan limits are capped at the current Fannie Mae conforming loan limit (currently $766,500). There are opportunities to go higher in loan limit, to the current high-balance loan maximum; however, I have found this does not make sense cost-wise
- 1st mortgage loan can be either Conventional or Government
There are two current programs available:
My Home Assistance Program
- a deferred payment, simple interest loan at 1.0% that can be used for down payment and/or closing costs. Payable when you refinance, sell or the 1st mortgage loan term ends, or if there’s a title change.
- maximum loan amount: 3.5% of purchase price if the CalHFA 1st is an FHA loan; 3% of purchase price if the CalHFA 1st is Conventional
- 30 year term
- $250 processing fee to CalHFA
CalPLUS ZIP (Zero Interest Program)
- The ZIP is a deferred payment, zero interest 2nd mortgage that is only available when combined with the CalPLUS 1st mortgage program. It can also be used along with MyHome.
- ZIP term matches the term of the 1st mortgage
- The 1st mortgage rate is higher than the standard CalHFA 1st due to the ZIP funds
- 2% ZIP funds are used towards closing costs. 2% is based on the 1st mortgage loan amount.
- $250 processing fee to CalHFA
CalHFA will also be rolling out their Dream for All program in the spring, which is a shared appreciation program. I will share more information on that once it is available.
