Down Payment Assistance

Buying a home for the first time can feel like a big leap, especially in California where home prices can be intimidating. But don’t worry—there are several programs available that can help make homeownership more accessible and affordable. Two of the main organizations offering assistance to first-time homebuyers in California are the California Housing Finance Agency (CalHFA) and the Golden State Finance Authority (GSFA). Let’s break down what each program offers and how they can help you get into your first home.

Navigating the homebuyer assistance programs may seem complicated—there are so many options, requirements, and details to consider! But don’t worry—that’s what we do all day, every day. At Fairway Independent Mortgage Corporation, we’re here to guide you through the process and help you determine which program is the best fit for your specific situation.

CalHFA Loan Programs

The California Housing Finance Agency (CalHFA) provides several options to help first-time homebuyers. If you haven’t owned and lived in a home in the past three years, you might qualify for CalHFA programs. Some areas even have income limits of up to $300,000! Here’s a closer look:

CalHFA Loan Options

1. CalHFA: These are 30-year, fixed-rate loans available as conventional or FHA loans. The CalHFA loans offer down payment and/or closing cost assistance. You’ll need a minimum credit score of 660, and you’ll also need to take an approved homebuyer education course.
2. CalHFA VA Loan: If you’re a military member or veteran, you might be eligible for a 30-year, fixed-rate VA loan through CalHFA. You’ll need to meet the standard VA loan requirements, including having a certificate of eligibility.
3. CalHFA USDA Loan: For those looking to buy in designated rural areas, CalHFA offers USDA loans with 30-year fixed rates. These loans have specific geographic and income requirements.
4. Forgivable Equity Builder Loan: This program offers a loan of up to 10% of the home’s purchase price, which is forgivable after five years if you continuously live in the home as your primary residence. This can be a great way to reduce the initial costs of buying a home.

Down Payment Assistance Programs

CalHFA also offers a range of down payment assistance programs to help bridge the gap for first-time buyers:

• MyHome Assistance Program: Provides up to 3% of the home’s purchase price (or 3.5% for FHA loans) as a deferred second mortgage for down payment and closing costs. You won’t need to repay these funds until you sell, move, or refinance the home.
• Zero Interest Program (ZIP): This is another deferred second mortgage option that can be combined with CalPLUS loans to help with closing costs.
• California Dream For All Shared Appreciation Loan: A newer program that offers first-generation, first-time buyers 20% of the home’s purchase price as a down payment. When you sell or refinance, you’ll repay that 20%, plus a share of the home’s appreciation, depending on your income.

GSFA Loan Programs

1. GSFA Platinum Program: This program provides up to 5% in down payment and closing cost assistance. The Platinum Program is available to both first-time and repeat homebuyers and can be combined with conventional, FHA, VA, and USDA loans. The assistance comes as a 15-year fully amortizing second mortgage loan.
2. GSFA Golden Opportunities Program: This program offers more flexibility regarding credit score and debit-to-income ratio while still providing up to 5% of the loan amount for down payment and/or closing costs. The assistance comes in the form of a 15-year fully amortizing second mortgage loan.
3. GSFA Member County “Assist-to-Own” Program: For those living or working in GSFA member counties, this program offers down payment assistance paired with a competitive interest rate mortgage. It’s a great way to get both financial help and a lower rate.

Key Benefits of GSFA Loans

• Generous assistance options (up to 5.5% of the loan amount)
• Can be paired with various loan types (conventional, FHA, VA, USDA)

National Loan Programs to Consider

Aside from CalHFA and GSFA, there are also national loan programs that can be valuable for first-time homebuyers:

• FHA Loans: Great for buyers with lower credit scores or limited savings; they require a minimum credit score of 580 and as little as a 3.5% down payment.
• VA Loans: Ideal for military members and veterans, these loans require no down payment.
• USDA Loans: Suitable for buyers in rural areas, these loans have no down payment requirement but do have geographic and income limits.
• Good Neighbor Next Door Program: Offers significant discounts and low-down payments for qualifying buyers in certain professions like teachers and law enforcement.