What is the best down payment assistance program for California?

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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
CalHFA Down Payment Assistance for California (Updated 2018) has in my honest opinion been the best program over the past few years.

Short video of the program benefits:

Here is a video that explains the different program options:

There have been some tremendous changes to this program allowing many more people to qualify which we will be talking about in this article. Some of the changes are the income limits (now much higher than before) and the sales price limits. Prior to these recent changes it was extremely difficult to fit people into this bucket because either they made too much money, not enough or were trying to purchase a home that was above the sales price limits.

This program has the lowest interest rate between all the CalHFA programs and has a max loan to value of 97% and maximum combined loan to value of 105%. Credit requirement is 640 and will follow Fannie Mae’s HomeReady guidelines for first-time homebuyers. This program can be combined with ZIP (Zero Interest Program) which is either 3% or 4% assistance based on the loan amount and is only available for first time homebuyers (someone who has not owned a residence for the past 3 years).

Homebuyer education is required for first time homebuyers!

You can layer programs with CalHFA to maximize the potential benefits. For example, if you’re a teacher or employee of a school you can qualify for 4% down payment or closing cost assistance at an affordable 2.5% interest rate. If you do not work in a school you can utilize the MyHome Assistance program which will provide 3.5% of the sales price or appraised value and is also 2.5% simple interest.

Among all the typical requirements for the program there are also property requirements. Properties that are not in a habitable shape are most likely not going to be eligible for this program unless the repairs are made.

Property Requirements:
  • Property must be owner occupied
  • Follow Fannie Mae’s HomeReady Guidelines
  • Adhere to any overlays your lender may have
  • CalHFA published Sales Price & Income Limits (Click Here)
  • 1 Year Home Warranty for Frist-Time Homebuyers
  • Property cannot exceed 5 acres
  • Manufactured Homes Not Allowed
  • Cannot be an income producing property, unless it meets Fannie Mae’s requirements for an accessory dwelling unit.

The other great part about this program is that no matter where you go, you are going to get just about the same deal due to the restrictions CalHFA has put to eliminate competition between lenders.

CalHFA Lender Requirements:
  • Lender must be a CalHFA Approved Lender
  • CalHFA Published rates must be used
  • The First Mortgage Fee Maximum is 3%
  • Processing fee of $250.00 for MyHome or the School Program as well as a fee of $50.00 for ZIP.

The most recent update to this program are the income limits! This has recently changed to be a very complex formula to now being simple math, for example San Diego’s income limits are 157,050.00 which opens the bucket to many, many more people to qualify.

If you would like more information about this product please don’t hesitate to reach out to us at 800-779-4547 or [email protected].
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