If you want to become a homeowner in Santa Clarita, there are several programs that will help you with the downpayment and closing costs. The California Housing Finance Agency (CALHFA) offers home buyers assistance programs that are primarily aimed at first-time buyers. Just to clarify, those who have not owned or moved into a home for three years can be considered first time home buyers.
Here is our overview of all current California first time homebuyer assistance programs now available in 2020:
CalHFA first-time homebuyer loan programs
CalHFA offers amazing programs that most California home buyers don’t take advantage of. These government-insured loan programs help with everything from your loan to your closing cost. But there are some requirements such as:
- Minimum credit score of 660 for conventional low income rate loans and 680 for conventional standard rate loans.
- Debt-to-income ratio can’t exceed 45 percent.
- In most instances, must be a first-time homebuyer and a U.S. citizen, permanent resident or qualified alien.
Your potential home will also need to meet certain standards…
- Sales price is no more than $765,000
- Property must be located within California and used as a primary residence.
- Must be a single-family, one-unit home
- Some condos, accessory dwelling units (guest houses and in-law quarters, for example), and manufactured homes are permitted. Talk to a home loan officer today to see if your property meets the requirement!
- No more than 5 acres of land.
CalHFA/CalPLUS FHA loan programs
The CalHFA FHA Program is a loan backed by the Federal Housing Administration that comes with a 30-year fixed interest rate. The FHA has specific borrowing and property requirements that must be met.
Another option: the CalPLUS FHA program. It’s an FHA-insured loan that comes with a slightly higher 30-year fixed rate but it’s paired with the CalHFA ZIP program. ZIP provides 3 percent or 4 percent of the CalPLUS FHA loan amount to assist with closing costs or prepaid items only.
Cal-EEM + Grant Program
The Cal-EEM + Grant program allows first-time or repeat buyers to combine an FHA-insured Energy Efficient Mortgage with a Cal-EEM Grant for certain energy-efficient home improvements. The interest rate on the Cal-EEM is currently fixed for 30 years.
Plus, you can combine the mortgage with a grant of up to 4 percent of the purchase price. This must be used to pay for energy-efficient improvements that exceed FHA’s cost limit. The maximum limit is either 5 percent of the property’s value (not exceeding $8,000) or $4,000, whichever is greater. Borrowers must get an energy assessment from a qualified energy assessor.
CalHFA VA Loan Program
The CalHFA VA program is a loan insured by the U.S. Department of Veterans Affairs. It features a CalHFA fixed interest rate for a 30-year term. The VA has its own requirements for eligibility.
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 payments and closing cost assistance programs to help you bridge this gap. These are considered “junior” loans, meaning payments are deferred until your home is sold, refinanced, or paid in full. This can make a difference and make monthly mortgage payments more affordable for many potential home owners.
MyHome Assistance Program
The MyHome Assistance Program is a deferred-payment junior loan that provides up to 3.5 percent of the purchase price or appraised value to help pay for down payment or closing costs. In many cases, you can combine MyHome Assistance with CalHFA’s loan programs.
School Teacher and Employee Assistance Program
The School Teacher and Employee Assistance Program is designed for first-time buyers who are teachers, administrators, school district employees, and staff members who work at California’s K-12 public schools. These loans provide up to 4 percent of the purchase price toward down payment and closing costs, and can only be used with an eligible CalHFA first mortgage loan. This loan can be used only for down payment assistance and/or closing costs.
Ready To Own Your First Home?
Now that you have the lowdown on all the California assistance programs for first-time buyers, it’s time to get the ball rolling. Our Loan Officers are ready to help you get your first home loan at the best rate in town!