Every state has some sort of home-buying assistance program. In California, it’s administered by the California Housing Finance Agency (Cal HFA).
"Cal HFA is essentially the state’s affordable-housing lender," said Ellen Martin, director of home ownership at Cal HFA.
Cal HFA has been providing down payment assistance for low- and moderate-income first-time home buyers for years. But now, a new program is set to supercharge their ability to help. It’s called the California Dream For All Shared Appreciation Loan program.
“It’s available to low- and moderate-income. So the upper income limit is $211,000," Martin said.
The loans pay for a down payment and closing costs.
For example, a two-bedroom house in western Chula Vista is on the market for $749,000 — a price that seems out of reach for many.
But with the new loan program, that home has become more affordable for more people.
"I thought the program was genius," said Scott Evans, executive vice president of Cross Country Mortgage, describing what he thought when he first heard about the new loan program.
“The state of California can give up to 20% for a down payment and closing costs. It’s a 0% interest rate. The payments are deferred for the entire life of the loan," explained Evans.
Evans said the new loan program has a shared equity program.
“When you sell the property or refinance the loan, they take up to 20% of the appreciation. The homeowner gets to keep 80%," he said.
Evans said another thing to consider are the tax breaks that become available when someone becomes a homeowner. He said they can be significant enough to help offset the cost of mortgage payments.
The money the state makes when a home sells or is refinanced goes right back into the program - helping more Californian’s dreams of home ownership come true.
Ellen Martin urged people who are interested to move quickly to apply. The state only has $300 million in the program and with thousands of Californians expected to apply, that money is expected to go fast.
For more information, visit calhfa.ca.gov.
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