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Buying a home for the first time can leave you with serious sticker shock. A sentiment that is especially true in California, which has some of the highest property prices in the U.S. Those looking to get over the homeownership barrier in The Golden State can take advantage of several programs to help with the down payment and closing costs.

The California Housing Finance Agency, or CalHFA, has access to a comprehensive selection of homebuyer assistance programs, mostly geared toward first-time homebuyers with low or moderate incomes. In California, you’re considered a first-timer if you haven’t owned and occupied a home in the past three years. Here’s an overview of CalHFA programs that can help you purchase your first home.

CalHFA first-time homebuyer loan programs

CalHFA offers borrowers access to conventional and government-insured loan programs to help first-time buyers obtain fixed-rate loans with the option to roll in down payment and closing cost assistance.

Borrower requirements

  • Minimum credit score of between 660 and 680, depending on the program.

  • Meet CalHFA’s income limits based on your specific area.

  • Attend the eHome homebuyer counseling course approved by CalHFA and present a certificate of completion.

  • Meet any additional loan requirements of your CalHFA-approved lender and the mortgage insurer.

The approved homebuyer counseling course can be taken online through eHome for $99.

Property requirements

  • Sales price can’t exceed $1,089,300.

  • Located within California and used as a primary residence.

  • Single-family (one-unit) homes; some condos, accessory dwelling units (guest houses and in-law quarters, for example) and manufactured homes might be permitted.

  • Land trusts and leaseholds aren’t eligible.

CalHFA and CalPLUS conventional loans

The CalHFA Conventional program is a first-mortgage loan insured through private mortgage insurance on the conventional market. The interest rate on the CalHFA Conventional loan is fixed throughout the 30-year term.

The CalPLUS conventional loan program comes with a slightly higher 30-year fixed interest rate, but you can combine it with the agency’s MyHome Assistance program for down payment help and Zero Interest Program (ZIP) for closing costs.

ZIP doesn’t charge borrowers interest for the assistance, which can be 2 percent or 3 percent of the purchase price. If you choose the higher assistance amount, you’ll receive a higher interest rate on the mortgage itself.

CalHFA and CalPLUS FHA loans

The CalHFA FHA Program is a loan insured by the Federal Housing Administration that comes with a 30-year fixed, low interest rate for a primary home. The FHA has specific borrowing and property requirements that must be met.

The CalPLUS FHA program is another FHA-insured loan that comes with a slightly higher 30-year fixed rate, but it’s paired with the ZIP closing cost assistance.

CalHFA VA loans

The CalHFA VA program is a loan insured by the U.S. Department of Veterans Affairs. It comes with a fixed, low interest rate for a 30-year term. The VA has its own requirements for eligibility.

CalHFA Forgivable Equity Builder Loan

The Forgivable Equity Builder Loan program gives first-time homebuyers a loan of up to 10 percent of the purchase price of the home. The loan is forgivable if the borrower continuously occupies the home as their primary residence for five years. This loan can only be used with a CalHFA first mortgage.

CalHFA down payment assistance programs

For many first-time homebuyers, saving up for a down payment and closing costs is one of the most daunting challenges to homeownership. CalHFA offers several down payment and closing cost assistance programs to help you bridge this gap.

These programs are considered “subordinate” or “junior” loans, meaning payments are deferred until your home is sold, or your mortgage is refinanced or paid in full — and that can help make monthly mortgage payments more affordable.

CalHFA MyHome Assistance Program

CalHFA’s MyHome Assistance Program is a deferred-payment junior loan that provides up to 3.5 percent of the purchase price or appraised value (whichever is lower) to help pay for down payment or closing costs. In many cases, you can combine this assistance with CalHFA’s loan programs.

Get started

You have the lowdown on California’s assistance programs for first-time buyers, and you’re ready to get the ball rolling. CalHFA itself doesn’t issue loans or make application decisions. However, it has vetted a list of approved lenders you can reach out to.

Generally, lenders have their own borrowing requirements, and interest rates vary. So, shop around with a few different lenders to ensure you’re getting the best deal.

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