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:

• First Mortgage Corp (661) 964-0700
• Universal American Mortgage (661) 702-0140
• CTX Mortgage (661) 255-1854
• Wells Fargo Mortgage (661) 284-6446 and (661) 799-4682
• Washington Mutual Mortgage (661) 254-8700
• National City Bank (661) 260-2751
• Wescom Credit Union (888) 493-7266 x5900

Happy house hunting! If you need a qualified Realtor to help you find your home, please contact Linda Slocum at (661) 670-0349.

Homestead protection may save your home and your home equity from unsecured creditors.

Homesteading in California can provide up to $150,000 in protection against creditors who may sue to force you to sell your home to pay the amounts that you owe them. The amounts owed can be as the result of lawsuits, or just from having overextended credit.

There are two types of homesteads available: an automatic homestead and a declared homestead. An automatic homestead protects some of your home equity until you sell your home, as long as you live in the home (you cannot homestead an investment property). A declared homestead can protect your home equity for up to 6 months after you sell your home, as long as you use the proceeds to buy a new home within 6 months and declare a homestead on that home.

Automatic Homestead

An automatic homestead is in place if you live in the home that you own. You do not have to complete any forms, and it protects your home equity until you sell your home. However, an automatic homestead does not provide the same level of protection as a declared homestead. 

A homeowner who is overextended financially and is being dunned by creditors or debt collection agencies should consult an attorney for advice on the need for filing a homestead declaration. If you are in financial trouble, or expect to be in financial trouble, you may want to consider filing a declared homestead.

Declared Homestead

A declared homestead is filed at the County Recorder’s Office on a properly signed and notarized form that you can either buy in an office supply store or download for free. According to the California Department of Consumer Affairs, “A properly prepared and recorded homestead declaration immunizes the home (and the land on which it is situated) from many (but not all) legal enforcement measures. For example, if a homeowner files a petition in bankruptcy, it may be possible, because of a homestead declaration, to retain the home, or at least a portion of the equity in the property, instead of losing it to creditors.”

In other words, if you sell your home voluntarily without a declared homestead in place, the protection of your home equity may be lost. This means that the proceeds of the sale of your home will go to the judgment creditor or creditors rather than to you, the owner, to use in purchasing another home. Remember that you must purchase a replacement home within 6 months and file a declared homestead on that new home in order for your homestead protection to remain in place.

A declared homestead will NOT protect you from foreclosure by your mortgage lender if you are behind in your payments. Nor will it protect you from a mechanic’s lien or if you are behind in child or spousal support. If you are unsure as to how to complete the Homestead Declaration form, you may wish to hire a homestead filing service. By law, these services cannot charge more than $25, including notary and filing services. You can also find various do-it-yourself guides that will provide examples as to how to complete the form.

At the County Recorder’s Office, the documents presented will be reviewed and recorded, with the original document being mailed back to you within 4-6 weeks. The base fee for recording documents is $7 for the first page, and $3 for each additional page. Certified copies can be requested for $6 for the first page and $3 for each subsequent page.

NOTE: The Van Nuys County Recorder’s Office will be closed until November 30, 2008. If you need to file a declared homestead before then, you’ll need to travel to the Lancaster office instead. Documents may also be mailed to: Document Analysis and Recording, P.O. Box 53115, Los Angeles, CA 90053-0115. Be sure to include the proper filing fees with each document to be recorded. For more information, call (562) 462-2125 in Los Angeles County.

How Much Equity Does a Homestead Protect?

A homestead can protect your home from unsecured creditors in the following amounts (there is no difference in amounts for automatic or declared homesteads):

Disclaimer: This information is not intended as a substitute for legal advice. Be sure to consult an attorney if you are having financial difficulties or if you are unsure of the homestead process. If you are considering filing bankruptcy or need assistance with foreclosure prevention, contact attorney Ray Bulaon at 818.243.7745.

Federal tax credits for energy efficient home improvements have been extended into 2009.

The recently-signed “Emergency Economic Stabilisation Act of 2008″ included an extension of the residential tax credits for energy efficient improvements. The previous tax credits expired at the end of 2007.

The new tax credits for installing energy efficient improvements are only good for 2009 installations - there will be no tax credits for improvements installed during 2008. So, if you’re doing some tax planning for 2009, it may be best to hold off on doing these types of improvements until after January 1!

Tax credits are available for insulation, replacement windows, water heaters, and certain high efficiency heating and cooling equipment. However, be aware that not all Energy Star rated improvements are eligible for the tax credit. Be sure to check EnergyStar.gov for rules and more details.

Here are some examples of the federal tax credits that are available to homeowners:

• Windows: 10% of cost, up to $200, for qualified ENERGY STAR windows, skylights and storm windows
• Doors (exterior): 10% of cost, up to $500, for qualifying doors (most ENERGY STAR doors will qualify)
• Roofs (metal): 10% of cost, up to $500, for qualifying ENERGY STAR metal roofs
• Insulation: 10% of cost, up to $500, for qualifying insulation (not vapor retarders or siding)
• Air Conditioning (split or package systems): $300 for qualifying systems, not all ENERGY STAR systems qualify
• Water Heaters (tankless only): $300 for qualifying systems
• Cars: Credits are available for certain cars, and is limited by 60,000 per manufacturer before a phase-out period begins
• Solar Water Heating: 30% of cost, up to $2,000, not available for water heaters used for pools or spas
• Solar Power (Photovoltaic): 30% of cost, up to $2,000, must provide electricity for the home
• Fuel Cells: 30% of cost, up to $1,000 per kW of power that can be produced

Please be aware that California may provide similar credits as well! See Go Solar California and California Solar Initiative for more information on solar power and available tax credits for California homeowners. Currently the California solar water heating credit is only available as a pilot program in San Diego. Southern California Edison (SCE) is also offering 90-minute Homeowner Solar Information Sessions, with upcoming sessions in Santa Barbara and Santa Monica. You can also take SCE’s Online Home Energy Survey to learn more about saving energy in your home.

Halogen torchiere lamps may be exchanged for energy efficient flourescent models.

The City of Santa Clarita, in cooperation with the Community Energy Partnership, will be sponsoring a free light exchange on June 7 from 8am to 12pm at the City Hall parking lot.

This light exchange is ONLY for halogen torcheire lamps, which are considered to be fire hazards. These lamps burn as hot as 1,000 degrees and have been responsible for hundreds of fires.

These lamps will be exchanged for free energy efficient flourescent lamps in either black, white or satin nickel. Pre-registration is required, and this event is limited to the first 500 registrants.

To register, either call 800.968.5203 or email partnership@energycoalition.org. In your email, be sure to include your name, address, phone number, number of lamps to be exchanged, and the color desired for your replacement lamps (black, white or satin nickel).

This program is NOT the same as the recent Operation Light Exchange, where both halogen and incandescent lamps were exchanged free of charge to over 10,000 participants.

This program is funded by California utility ratepayers and administered by Southern California Gas Company and Southern California Edison, under the auspices of the California Public Utilities Commission.