If you are facing challenges making your down payment on your first home, there is a program that can help that is offered through the California Housing Finance Agency (CalHFA).
What is CalHFA Down Payment Assistance?
If you qualify for CalHFA Down Payment Assistance, you can take out a simple interest rate subordinate loan with deferred payment. You can use the funds from this loan to help you cover the down payment, your closing costs, or both.
The assistance you receive through CalHFA is referred to as a “silent second loan” or “silent subordinate loan.” What this means is that your payments are deferred, and will not come due until you finish paying on your mortgage, sell your home, or refinance. In other words, this down payment assistance loan will not be part of your monthly bills, even though you must repay it eventually.
You can participate in the CalHFA Down Payment Assistance program while taking advantage of other grants and loans to help you with your down payment.
Types of CalHFA Down Payment Assistance
CalHFA offers several types of down payment assistance:
- CalHFA MyHome Assistance Program Government Loans (FHA): You can borrow up to 3.5% of the purchase price of the home or its appraised value (whichever is lower). Use it for closing costs or your down payment.
- CalHFA MyHome Assistance Program Conventional Loans: Borrow up to 3% of the purchase price of the home or its appraised value (whichever is lower). Use it for closing costs or your down payment.
- Forgivable Equity Builder Loan: If you are getting a CalHFA first mortgage and plan to occupy your home for at least five years as your primary residence, you may qualify for this forgivable loan to help you build immediate equity.
- Zero Interest Program (ZIP): This program is available for closing costs only.
Are You Eligible for the CalHFA Down Payment Assistance Program?
To qualify for the CalHFA Down Payment Assistance Program, you must meet the following requirements:
- You must be a first-time homebuyer in California.*
- You need to be a US citizen, US national, or Qualified Alien.
- You must intend to occupy the property you are purchasing.
- There are requirements you need to meet for your credit and income.
- You will have to participate in a homebuyer education counselling course and receive a certificate of completion.
- The property you are purchasing must be eligible.
*There are some exceptions to the first-time homebuyer rule. Please consult with us for full details. Also, note that “first-time homebuyer” in this context is simply any homebuyer who has not owned a home within the past three years.
How to Apply for the CalHFA Down Payment Assistance Program
To apply for CalHFA Down Payment Assistance, you need to go through an approved mortgage professional like the loan officers at Mortgage Consultants Group.
You will also need to bring documentation to your appointment. This includes bank statements, pay stubs, tax returns, and any other documentation that may help you verify your employment and income.
We Can Help You Apply for the CalHFA Down Payment Assistance Program
There is no need to put off buying a home because you are unable to afford a high down payment. Government-backed mortgage programs like FHA and VA loans and the CalHFA Down Payment Assistance Program can help.
If you have questions about the CalHFA Down Payment Assistance Program or would like to apply, please contact us today at (916) 669-1682 to schedule your consultation. We work with borrowers in Rancho Cordova, Gold River and throughout Sacramento, El Dorado, Placer, San Joaquin and Stanislaus Counties. We can also serve you elsewhere in California.