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San Francisco Bay Area First Time Home Buyer? | The Ultimate Guide to First Time Home Buyer Programs California ☀️

Last Updated on: 29th February 2024, 09:28 am

Buying your first home is an exciting milestone, and the dream of homeownership is now more accessible than ever, especially for first time home buyers in California. The state offers an array of first time home buyer programs that cater to making this significant step more affordable, even in instances of bad credit!

Typically, being a first time home buyer in California means you haven’t purchased a home in the last three years. This broader definition allows individuals and families to take advantage of various first time home buyer grants in California and first time home buyer loans in California. Additionally, down payment assistance programs in California can significantly reduce the financial hurdles of entering the housing market. Whether it’s through a first time home buyer tax credit or localized support like a first time home buyer program in San Francisco, these initiatives are essential in supporting your journey to homeownership.

First Time Home Buyer Tax Credits & Down Payment Assistance in California

Becoming a homeowner in California is now within reach, thanks to a variety of helpful assistance programs. The following programs aren’t full-fledged financing options for the home and instead include California first time home buyer tax credit programs, down payment assistance, and other first time home buyer grants California.

California MyHome Assistance Program

One of the best down payment assistance programs in California, MyHome offers two options to help aspiring first time homeowners with the down payment or closing costs. The first is via CalHFA Government Loans (FHA). This deferred-payment loan (meaning no monthly payments; you repay the loan when you move, sell, refinance, or fully pay off your home) provides assistance for down payment and/or closing costs of up to 3.5% of the purchase price or appraised value.

The second is CalHFA Conventional Loans, which are essentially the same thing but for 3% of the closing cost or appraised value. You must be a California first time homebuyer to qualify, as well as purchasing a single-family home, using it as your primary residence, completing homebuyer education counseling, and meeting certain income limits.

California Dream For All Shared Appreciation Loan

For down payment assistance in California, this program is essentially a smaller, separate loan to cover your down payment that works with the Dream For All Conventional first mortgage. You’ll repay the original amount of this down payment assistance loan when you sell or transfer the home, as well as additional costs calculated based on the home’s appreciation value. You must be a first time home buyer in California and consult with a CalHFA-Approved Lender who offers the program.

CalHFA Accessory Dwelling Unit (ADU) Grant Program

The CalHFA ADU Grant Program grants up to $40,000 in assistance to homeowners in California for building accessory dwelling units (ADUs). This program is open to all, not just first-time buyers, making it broadly accessible. However, it’s essentially a first time home buyer grant in California as an ADU can serve as a first home for individuals on a relative’s or friend’s property, offering a unique pathway to homeownership. The grant covers pre-development and non-recurring closing costs and does not require repayment, supporting California’s initiative to increase affordable housing, perfect for a first time home buyer in California with bad credit.

Pathway to Homeownership Closing Cost Assistance

The Pathway to Homeownership Closing Cost Assistance program provides financial support to homebuyers in California. It explicitly addresses closing cost expenses with grants up to $10,000, making the home-buying process more accessible for low to moderate-income first-time homebuyers in California.

 

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Forgivable Equity Builder Loan

This first time homebuyer loan California is designed to assist with home purchases and is structured to be forgivable. If certain conditions are met over time, it can convert into a grant that doesn’t need to be repaid. Eligibility for the “Forgivable Equity Builder Loan” includes being a first-time homebuyer, with exceptions for specific HUD and FHA programs. The borrower’s previous property must have been destroyed in a major disaster in California within the past year and was their primary residence.

All borrowers must be U.S. nationals or “Qualified Aliens.” They must also meet the credit, income, and loan requirements of CalHFA’s mortgage program, the approved lender, the Master Servicer, and the mortgage insurer/guarantor.

First Time Home Buyer Loans in California

California first-time homebuyers can access various loan programs designed to make homeownership more attainable. This section delves into these options, ranging from national offerings like USDA and FHA loans to specific California first-time home buyer programs. With opportunities that feature favorable loan terms, and even programs catering to a first time home buyer in California with bad credit, these loans are crucial allies in the journey to homeownership.

CalHFA FHA Loan Program

Aimed at first-time buyers in California who undergo home buying education and meet income requirements, this FHA-insured, 30-year fixed-rate loan covers primary resident home purchases statewide. It requires repayment and is ideal for primary home purchases, with qualifications including income and credit standards.

CalPLUS FHA Loan Program

This first time home buyer loan in California, for first-time buyers across the state, offers an FHA-insured mortgage with a higher interest rate than the conventional FHA program with closing cost aid through the CalHFA Zero Interest Program (ZIP). It’s a 30-year fixed-rate loan that needs repayment and meets FHA qualifications with the same requirements as above.

CalHFA VA Loan Program

The CalHFA VA Loan Program, tailored for California’s first-time home buyers with military backgrounds, offers a VA-insured, 30-year fixed-rate loan available statewide. This program necessitates repayment and adheres to VA loan qualifications, specifically used for purchasing homes. In addition, borrowers must use the property as their primary residence and complete homebuyer education counseling.

The program is subject to income limits and requires a valid certificate of eligibility per VA guidelines. Suitable properties include single-family, one-unit residences, including approved condominiums/PUDs, with certain restrictions on types of housing.

CalHFA USDA Program

The CalHFA USDA Program is designed for first-time homebuyers in California rural areas. It offers a USDA-backed, 30-year fixed-rate mortgage, which can be combined with the MyHome Assistance program. This loan requires the borrower to occupy the property as their primary residence, with no non-occupant co-borrowers.

Applicants must complete homebuyer education counseling and meet USDA income limits. Eligible properties include single-family, one-unit residences and some types of manufactured housing located in USDA-designated rural areas. Condominiums are also eligible, subject to first mortgage guidelines.

CalHFA Conventional Loan Program

This first time home buyer loan in California offers a 30-year fixed-rate mortgage with private mortgage insurance. Borrowers are required to complete homebuyer education counseling and meet specific income limits. This first time home buyer programs CA is suitable for purchasing single-family, one-unit residences, including approved condos/PUDs and some manufactured homes. Interest rates vary based on financial circumstances and lender fees, and it’s advised to consult with a CalHFA-approved loan officer for precise rate quotes.

CalPLUS Conventional Loan Program

Available for California first-time buyers, offering a conventional mortgage with a higher interest rate versus the standard program and closing cost support through CalHFA Zero Interest Program (ZIP). It’s a 30-year fixed-rate loan requiring repayment, adhering to conventional loan standards.

First Time Home Buyer Programs in San Francisco Bay Area

This section focuses on specialized first time home buying assistance available solely to those in the vibrant San Francisco Bay Area metro. These programs cater to the unique real estate landscape of the Bay Area, providing essential support and financial assistance for those navigating a potential first time home buyer program in San Francisco Bay Area.

Below Market Rate (BMR) Program

One of the more enticing first time home buyer programs in San Francisco Bay Area, CA, this program is designed specifically for first-time homebuyers. Brought to you by the Mayor’s Office of Housing and Community Development (MOHCD), it allows eligible buyers to purchase a home at prices lower than the typical market rate in a lottery-like style.

To qualify, applicants must have an income below a certain threshold, which varies based on household size, with the highest limit for a one-person household being $151,300 per year.

Mayor’s Office of Housing and Community Development | 1 Van Ness Ave # 5, San Francisco, CA 94103 (415-701-5500)

Down Payment Assistance Loan Program (DALP)

This first time home buyer program in San Francisco provides significant aid, offering up to $500,000 for down payment assistance. This “silent second” loan requires no monthly payments and is repayable upon selling or transferring the property, including a share of appreciation.

Eligibility includes income limitations, set at 200% of the Area Median Income (AMI) for general applicants, with special provisions for SFUSD educators and first responders through separate funding sources. The application process involves a lottery system, with no fees for applying, though standard MOHCD program fees are collected at closing.

Mayor’s Office of Housing and Community Development | 1 Van Ness Ave # 5, San Francisco, CA 94103 (415-701-5500)

City Second Loan Program (CSLP)

The City Second Loan Program in San Francisco provides a downpayment loan of up to $500,000, aiding first-time homebuyers in purchasing units in select developments. This no-interest, deferred payment loan becomes repayable upon the sale, rent, or transfer of the property, including a portion of the property’s appreciation.

Eligibility criteria include not having owned a property in the last three years, completing homebuyer education, and adhering to income limits set at 145% of the Area Median Income (AMI). Properties under the CSLP can be sold at market prices, and the program requires the buyer to notify MOHCD before selling, granting them a Right of First Refusal.

Mayor’s Office of Housing and Community Development | 1 Van Ness Ave # 5, San Francisco, CA 94103 (415-701-5500)

California First Time Home Buyer FAQs”

Here are a few answers to some common questions regarding first-time home buyer programs in CA.

  • Are first time home buyer programs worth it? Absolutely, they provide financial assistance, lower interest rates, and other benefits to make homeownership more accessible.
  • What is a first time home buyers program? It’s a program offering financial aid to first-time buyers, typically including down payment assistance, tax credits, or lower interest rates.
  • Who qualifies for down payment assistance in California? Generally, low to moderate-income first-time buyers who meet specific income and credit criteria, although it varies by program!

Navigating the journey of being a first time home buyer in California can be a complex but rewarding experience. With various programs offering assistance in down payments, tax credits, and more, achieving the dream of owning a home is more accessible than ever. As you take this significant step, remember that AMS Relocation is here to support you.

Renowned as the Best San Francisco Bay Movers, we’re ready to assist in making your transition to a new home smooth and stress-free, so call now at 650-284-2931 and discuss your transition into our beautiful area!

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