About: This is a program that utilizes insurance from the Federal Housing Administration to offer recipients a 30-year fixed-rate loan. To be eligible for this program, there are certain requirements you must fulfill as a home buyer. When you deciding to buy your first home in California, you need to purchase it as your primary residence. If you are planning to be a co-borrower, then you will not be eligible to purchase a home. When you decide to borrow money from this program, you have to complete the homebuyer education counseling that is going to give you the proper credentials to make your official purchase. This includes an eight-hour course that is help completely online. This provides you with the one-on-one counseling sessions you need to understand all of your options as a first-time home buyer in the state of California.
Overview: If you want low mortgage rates for your first home purchase, the CalHFA FHA Loan Program is the one for you. The United States Federal Housing Administration is the main contributor to this loan for people in California who need financial assistance. Compared to conventional loans, the FHA loans prove to be a safer option for the institutions who are lending the money. The lower interest rates of 3.5% are represented by the fact that the federal government is the main supporter of these loans. People who use this loan must have a minimum of 660 for their credit score as well as a DTI ratio of no higher than 43%. Additionally, your annual income can’t exceed that of California’s average income limit in order for you to be eligible for this loan.
Pros & Cons: The CalHFA FHA loan can easily be paired with other financial assistance programs that are designed to help you make your first home purchase. Also, this loan has much more reasonable credit requirements than other loan programs. Unfortunately, you will most likely have to deal with higher upfront costs with this loan given the interest rate for the loan is so low. You will also need to pay a strict mortgage insurance given the FHA loan does not have very flexible requirements in comparison to conventional loans. Due to these slight deterrents, you should always try to get a conventional loan even if you think you might not be approved.
Summary: If you have a history of bad credit, the CalHFA FHA loan is a great pick for you. You will be able to receive the financial assistance you need to buy your first home in California without worrying about extremely high interest rates. In some cases, you also may not have to put too much money down initially but this concept may vary depending on the current state of your credit score value. You should always try to get a conventional loan first because those usually have more flexible requirements given you have proven that you have a solid line of credit. If you aren’t able to secure a conventional loan for your purchase, then the CalHFA FHA loan will definitely help you out.
About: This loan program will provide you with a 30-year fixed-rate loan that is completely insured by the United States Department of Veterans Affairs. The eligibility requirements are very similar to those being offered by the other CalHFA loan programs. You must consider this your primary residence so you aren’t able to utilize this new home purchase in a co-borrower status. To officially acquire this loan, you need to have the proper supporting documents for eligibility that include a valid certificate that accurately follows all VA guidelines.
Overview: This CalHFA VA loan program is mostly for current military personnel, veterans who are residents of California, or the surviving spouses of people who have served in the armed forces. The loan specifically helps people who are currently in the military or were formerly parts of the military. You want to purchase your first home without feeling an extreme financial burden and this loan exists to help you do just that. The Department of Veterans Affairs completely funds this loan so it can be utilized by those who meet the necessary requirements. These requirements are the same as those being used for the CalHFA FHA loan program as well.
Pros & Cons: Given this is also a government loan program, it has the same pros and cons as CalHFA loans. The CalHFA VA program can easily be paired with other financial assistance programs that are designed to help you make your first home purchase. Also, this loan has much more reasonable credit requirements than other loan programs. Unfortunately, you will most likely have to deal with higher upfront costs with this loan given the interest rate for the loan is so low. You will also need to pay a strict mortgage insurance given the FHA loan does not have very flexible requirements in comparison to conventional loans. Due to these slight deterrents, you should always try to get a conventional loan even if you think you might not be approved.
Summary: You will most likely qualify for the CalHFA VA loan program if you are a current active-duty military member, a veteran, or the surviving spouse of someone who has previously served in the armed forces. There are a few other credit related requirements you must meet in order to be eligible and these are similar to those supported by the CalHFA FHA and CalPLUS loan programs. If you’ve served the country, you deserve to be able to purchase the home you want for the very first time.
About: This program provides you with up to 3.5% of your home’s purchased price to help you make the necessary down payment you need in order to buy your first home. Although this percentage usually holds true, there is a maximum value you are eligible to receive when using this assistance program. You cannot acquire more than $11,000 to help you make your down payment. Fortunately, you don’t have to worry about paying back this loan until you are in the market to sell or refinance your property. This concept holds true because the program is a deferred-payment junior loan.
Overview: In general, this is considered a deferred-payment junior loan which allows you the flexibility to only worrying about paying it back when you sell, refinance, or completely pay off your home. Usually, low to moderate income first-time home buyers choose this loan as their main financing option. A s a first-time home buyer in California, you can easily use this loan to help make your down payment. The best part is you can combine this loan with a CalHFA mortgage loan to help you completely cover all of the costs necessary to close on your new house. Make sure you pay close attention to the 3.5% or $11,000 cap that is placed on the loan so you ensure you will have enough additional money to make your down payment after you reach the $11,000 limit.
Pros & Cons: The 3.5% amount is actually an extremely competitive value when it comes to the loan market. This amount is generous and most people who are within the low to moderate annual income range will be able to utilize this amount to make their down payment. Additionally, you don’t have to worry about paying this off until you sell, refinance, or pay off your home. This is an extremely attractive factor for most given they will not have the amount of funds necessary to begin paying off their loan after already making such a large purchase. Unfortunately, there are various stipulations within the application process that deter people who are potentially thinking about utilizing this loan option. Just make sure you do all your research before getting started on your application.
Summary: The MyHome Assistance Program can be a great option for you if you fall into the low to moderate annual income range and you are in the market to buy your first home in California. There are strict stipulations that accompany that application process so make sure you understand all of those before you get started. Other than that, this can be a great option for you to use given you will have help making your down payment or completing the costs of closing. It is important to note that you have to have a CalHFA first mortgage loan in order to take advantage of the benefits the MyHome Assistance Program has to offer.
About: The CalHFA Zero Interest Program is also called the “ZIP loan”. This is a second mortgage that you can use in combination with other CalPLUS loans. Utilizing this loan will allow you to own a home more easily because you will be able to afford the costs associated with your first purchase. When you are borrowing money, you will have a zero-interest loan with a value of up to 3% of your first mortgage.
Overview: This program is for the low-income buyers who are purchasing a home for the very first time. The CalHFA Zero Interest Program also falls into the category of a junior loan. This means you can defer the payments for quite some time. You can continue to defer these payments for the entire duration that you’re living in your purchased home. Unfortunately, if you ever default on a mortgage, you will have to start paying this loan back so you need to make sure all your financial affairs are in order before you borrow the money from this program.
Pros & Cons: With this program, you will receive up to 3% of your total loan amount which is provided as a no-interest second loan. Also, the loan terms for the CalHFA Zero Interest Program match those of the CalPLUS loan term so you can combine the two loans to work best for your financial needs. As long as you are living in your house and utilizing the loan, you don’t have to worry about paying it back. You don’t want to default on any of your mortgages because then you will have to instantly start paying back this loan even if you don’t have the finances to do so. This could unfortunately be a very quick way of getting yourself into major debt that might cause you to go bankrupt. Before receiving this loan, you need to make sure you will always have the funds you need to pay off your house as you agreed to in your mortgage contract.
Summary: This program is great for any California resident who is looking to purchase their first home. You can use this program in combination with CalPLUS FHA and CalPLUS Conventional loans to ensure the entire home buying process is much more affordable and convenient for you. The CalHFA Zero Interest Program will pay some of your down payment as well as your closing costs to help you purchase the home you want without having to worry too much about the financial burden you would endure if you were paying completely out of your own pocket upfront. It’s hard not to take advantage of a great deal like this.