California Homebuyer Down Payment Assistance Programs are Still Available

October 14th, 2008 Linda Slocum Posted in First Time Homebuyers, Money Saving Tips, Santa Clarita Real Estate |

California Housing Agency offers down payment assistance to qualified first time homebuyers.

One of the biggest challenges facing first time homebuyers is coming up with enough money for a down payment. Fortunately, first time homebuyers in California may be able to take advantage of the down payment assistance programs offered by CalHFA (California Housing Finance Agency). These programs provide either low-interest or no-interest loans for qualified first time homebuyers to cover their down payment or closing costs, and are considered to be “junior” loans (2nd mortgages). Payments are generally deferred on the 2nd mortgages created by these programs.

Homebuyer Qualifications

In order to qualify for the CalHFA down payment assistance program, you must be a first time homebuyer. For purposes of CalHFA, a first time homebuyer is someone who has not owned and occupied their own home during the last 3 years. However, this requirement may not be necessary if you are buying in a Federally-designated Targeted Area.
Certain income requirements must also be met for the CalHFA program. For Los Angeles County, the moderate income limits are $90,960 for 1-2 person households and and $106,120 for households with 3 or more occupants. The low income limits are $54,576 and $62,762, respectively.
The home purchased must be within certain purchase price limits for the county. For Los Angeles County, the maximum purchase price is $729,750 for most areas, and may be as high as $734,891 for new construction purchases in Targeted Areas.
CalHFA down payment assistance funds are only available for owner-occupied homes. You must live in the home for the entire term of the loan, or until the home is sold or refinanced.
The homebuyer must meet the lender’s credit, income and loan requirements.
The homebuyer must a citizen or other national of the United States or a qualified alien.
The homebuyer must complete homebuyer education counseling and received a certificate of completion through an eligible homebuyer counseling organization.

Available Down Payment Assistance Programs

Be sure to check with a qualified CalHFA lender for updates to any of the program requirements. As of the time of this writing, the available down payment assistance programs are as follows:

Affordable Housing Partnership Program (AHPP)
- A joint effort by CalHFA and cities, counties, redevelopment agencies and housing authorities. A deferred payment subordinate loan from a locality assists first-time homebuyers with down payment and/or closing costs.
California Homebuyer’s Downpayment Assistance Program (CHDAP)
- Creates a deferred-payment junior loan of an amount up to the lesser of three percent (3%) of the purchase price or appraised value.
Extra Credit Teacher Home Purchase Program (ECTP)
- A low interest rate CalHFA first loan, together with a forgivable interest CalHFA junior loan to assist eligible teachers, administrators, staff members and classified employees to purchase their first home.
- Amounts range from $7,500 to $15,000, depending on the location of the property, or 3% of the purchase price, whichever is greater. This junior loan is only available when combined with a CalHFA first mortgage loan. Interest on the junior loan is deferred and may be reduced to zero if the borrower meets continued eligibility requirements.
- This program may be combined with other CalHFA-approved down payment assistance loans or grants (with the exception of CHDAP) to help in the purchase of the home.
- In order to qualify for this program, the homebuyer must be employed by a High Priority K-12 public school. High Priority schools are those with API scores in the bottom 50%, have no API scores and 70% of the student are eligible for free or reduced cost lunches, or are county continuation schools. In the Santa Clarita Valley, Bowman High School is the only continuation school.
School Facility Fee Down Payment Assistance Program (SFF)
- A conditional grant program that provides assistance to buyers of newly constructed homes throughout California.

Finding a Lender

If you’re a first time homebuyer wanting to take advantage of the California down payment assistance programs, you must use a lender who is qualified by the CalHFA. You can search for lenders here for an updated list. Santa Clarita area lenders qualified for these programs include the following: