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How can I get help with my down payment?

Jeff LaMonte.

Mortgage down payment assistance programs in California are designed to help first-time homebuyers or low- to moderate-income buyers afford a home. These programs can significantly reduce the financial barriers to homeownership by providing grants, low-interest loans or forgivable loans to cover some or all of the down payment and sometimes closing costs. Here's an overview of how these programs work and why you might consider using them:

Types of Down Payment Assistance

Grants: Some programs offer outright grants that do not need to be repaid. These are usually targeted at low-income buyers and may have specific conditions, such as remaining in the home for a certain period.

Deferred Payment Loans: These loans typically do not require payments until the home is sold, refinanced or the mortgage is fully paid off. They often carry zero or very low interest rates.

Low-Interest Loans: Some down payment assistance comes in the form of low-interest loans, which must be paid back over a set period, often parallel to the term of the primary mortgage.

Forgivable Loans: These loans may be forgiven over a period of time if the borrower meets certain conditions, such as staying in the home for a certain number of years.

Specific programs for California

CalHFA (California Housing Finance Agency): CalHFA offers several down payment assistance programs, such as the MyHome Assistance Program, which provides a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value to cover down payment and closing costs.

CalPLUS with ZIP (Zero Interest Program): This is a special program from CalHFA that includes a zero-interest loan to cover closing costs.

Local City and County Programs: Many local governments in California also offer their own down payment assistance programs, which can be layered with state programs.

Considerations in using a DPA

Eligibility Requirements: These programs often have specific eligibility requirements including income caps, property location and first-time homebuyer status.

Long-Term Commitment: Some forgivable loans require you to stay in the home for a certain number of years. Selling or moving before this period may require you to repay some or all of the assistance received.

Possible Additional Costs: While down payment assistance can reduce upfront costs, it sometimes comes with additional fees or slightly higher interest rates.

For anyone considering buying a home, particularly if affordability is a concern, exploring down payment assistance programs is a worthwhile step.

You can reach Jeff LaMonte at (805) 794-0444 or Laura Johnson at (661) 303-7853.