STOP RENTING & START OWNING

Are You a First-Time Homebuyer?

How do you qualify for a first-time home buyer program in the USA? 

A first-time home buyer is anyone who has not owned their primary residence in the last three years, according to the US government’s definition. That three-year cut-off point is based on the upcoming purchase property closing date. (The date of the mortgage application does not impact eligibility for certain first-time home buyer program benefits.)  

First-time home buyers can gain access to assistance programs and home loans that repeat home buyers might not be privy to. If you have owned a property previously, perks open to first-time buyers may still be open to you (if, as mentioned, you have not owned a home in at least three years). First-time home buyers can also include:  

  • Single parents 
  • Children 
  • Displaced homemakers 
  • Renters 
  • People living rent-free 

Low-income, first-time homebuyers may qualify for a low-interest, deferred payment loan of up to 17% of the purchase price for down payment assistance and 4%, up to $10,000 in closing costs assistance.
CALHFA – Sales Price of the home cannot exceed $1,068,000
The maximum first mortgage loan amount cannot exceed current applicable FHA, USDA or VA loan
limits for the county in which the property is located.
• The maximum loan amount for a VA loan is The FHFA High-Cost Loan Limit

Income Limits For the *CALHFA Loans
Income cannot exceed CalHFA Income Limits
Minimum Credit Score for the *CALHFA Loans
• The minimum credit score is 620 Minimum / 640 is Average for all Government Loans
• Borrower(s) with no credit score are not permitted
• Non-traditional credit is not accepted
CalHFA FHA or CalPLUS FHA must have a minimum credit score of 660 under the
following scenarios:
› Manually underwritten loans
› Manufactured housing

Let’s look at some of typical first-time home buyer qualifications: 

  • Credit score: 620 minimum 
  • Down payment: 3% minimum 
  • Debt-to-income ratio: Less than 43% 
  • Steady income: even self-employed people can get mortgages 
  • Two-year employment history 
  • Clean credit score 

To know for sure, you should understand that a first-time homebuyer is defined as someone who has not owned and occupied their own home in the last three years. That means if you’ve never owned a home, you’re a first-time homebuyer. It also means that if you owned your home three or more years ago, but sold it, you are right back to being a first-time homebuyer again, and you can take advantage of all of the benefits of California Housing Finance Agency – (CalHFA) CalHFA’s first-time homebuyer programs.
Most people borrow the large amount of money they need to buy a home. This type of borrowing is called a first mortgage loan. There are also mortgage loans that can help out with down payment or closing costs, called junior loans.

California Housing Finance Agency (CalHFA) – CalHFA has first and junior loan options for low to moderate income families, including low to zero interest rate down payment assistance loans. CalHFA does not accept loan applications directly. After determining if you are eligible for a CalHFA home loan, the next step is to speak to a knowledgeable loan officer and get pre-qualified to determine how much of a loan you can afford.
A CalHFA approved Lender will qualify you for a home loan –

If you are a first-time homebuyer, and have been pre-qualified, you must attend a homebuyer education course. This education will help you understand the importance and responsibilities of homeownership. In order to obtain a CalHFA home loan, your loan officer must produce your certificate of completion.

The Next Step is to Talk to a local Realtor to guide you through this process – Once you’ve found a home that fits most of your needs and is in your price range, make an offer through your real estate agent. If your offer is accepted, congratulations! If not, don’t lose heart, and don’t feel pressured into making an offer that’s outside your budget; there are other homes just waiting for the right new owner.

Here are several of California’s Down Payment Assistance Programs and Grants

The money you put “down” or the down payment on your home loan can be one of the largest hurdles for many first-time homebuyers. That’s why CalHFA offers several options for down payment and closing cost assistance. This type of assistance is often called a second or subordinate loan. CalHFA’s subordinate loans are “silent seconds”, meaning payments on this loan are deferred so you do not have to make a payment on this assistance until your home is sold, refinanced or paid in full. This helps to keep your monthly mortgage payment affordable.

MyHome Assistance Program
FHA: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $11,000. Borrowers with credit scores as low as 500 can qualify for an FHA loan with a 10% down payment. Guidelines and policies will vary by lender. This historic home loan program continues to open the door to homeownership for millions of Americans who might struggle to secure conventional financing.
FHA homebuyers with credit scores of 680 can often qualify for the same interest rate as conventional borrowers with a score of 740.

USDA, Conventional: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $11,000.

VA: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs.

Note that the $11,000 cap does not apply to school employees and fire department employees, or those purchasing new construction homes, manufactured homes, or homes with ADUs.

Other Type of Home ownership Programs

First Mortgage Programs

Government Loans

CalHFA FHA Loan Program
The CalHFA FHA Program is an FHA-insured loan featuring a CalHFA 30 year fixed interest rate first mortgage. FHA loans require just a 3.5% down payment for borrowers with a 580 credit score or higher. For homebuyers with less-than-perfect credit, FHA loans offer additional significant benefits. The government backing means average FHA interest rates are typically lower than average rates for conventional mortgages.. Borrowers with credit scores as low as 500 can qualify for an FHA loan with a 10% down payment. Guidelines and policies will vary by lender. For homebuyers with less-than-perfect credit, FHA loans offer additional significant benefits. The government backing means average FHA interest rates are typically lower than average rates for conventional mortgages.
FHA homebuyers with credit scores of 680 can often qualify for the same interest rate as conventional borrowers with a score of 740.

This historic home loan program continues to open the door to homeownership for millions of Americans who might struggle to secure conventional financing.

CalPLUS FHA Loan Program
The CalPLUS FHA program is an FHA-insured first mortgage with a slightly higher 30 year fixed interest rate than our standard FHA program and is combined with the CalHFA Zero Interest Program (ZIP) for closing costs.

CalHFA VA Loan Program
The CalHFA VA program is a VA-insured loan featuring a CalHFA fixed interest rate first mortgage. This loan is a 30-year fixed interest rate first mortgage.

CalHFA USDA Program
The CalHFA USDA Program is a USDA Guaranteed first mortgage loan program, which can be combined with the MyHome Assistance Program (MyHome). This loan is a 30-year fixed interest rate first mortgage.

Conventional Loans

CalHFA Conventional Loan Program
The CalHFA Conventional program is a first mortgage loan insured through private mortgage insurance on the conventional market. The interest rate on the CalHFA Conventional is fixed throughout the 30-year term.

CalPLUS Conventional Loan Program
The CalPLUS Conventional program is a conventional first mortgage with a slightly higher 30 year fixed interest rate than our standard conventional program and is combined with the CalHFA Zero Interest Program (ZIP) for closing costs.

Down Payment Assistance Programs

The money you put “down” or the down payment on your home loan can be one of the largest hurdles for many first-time homebuyers. That’s why CalHFA offers several options for down payment and closing cost assistance. This type of assistance is often called a second or subordinate loan. CalHFA’s subordinate loans are “silent seconds”, meaning payments on this loan are deferred so you do not have to make a payment on this assistance until your home is sold, refinanced or paid in full. This helps to keep your monthly mortgage payment affordable.

California Dream For All Shared Appreciation Loan
The California Dream For All Shared Appreciation Loan is a down payment assistance program for first-time homebuyers to be used in conjunction with the Dream For All Conventional first mortgage for down payment and/or closing costs.

MyHome Assistance Program
CalHFA Government Loans (FHA): MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs.

CalHFA Conventional Loans: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs.

Homebuyer Education Requirement

CalHFA firmly believes that homebuyer education and counseling is critical to the success and happiness of a homeowner, and requires homebuyer education and counseling for first-time homebuyers using a CalHFA program.

Who has to take this Homebuyer Education and Counseling course?

Only one occupying first-time borrower on each loan transaction.

How do I take this education and counseling course?

Borrower Requirements

CalHFA does not accept applications directly. A CalHFA approved Lender will qualify you for a home loan, so you will need to apply with one of our Preferred Loan Officers or approved Lenders. Each loan program that CalHFA offers to homebuyers can have different criteria for income limits, minimum credit scores, citizenship etc. To learn about specific requirements and benefits for each program, review the program descriptions on the Loan Programs tab.

Visit our Mortgage & Eligibility Calculators section to assist you in estimating your monthly payments, how much you can afford, and which CalHFA programs you may be eligible for.

In general these are borrower eligibility requirements for all CalHFA programs:

  • You will need to meet credit, CalHFA income limits and loan requirements of the CalHFA-approved lender and the mortgage insurer.
  • You will need to occupy the property as your primary residence.
  • CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.
  • CalHFA’s down payment program MyHome requires you to be a first-time homebuyer. See the definition of a first-time homebuyer.

Be sure to check the borrower eligibility section of each individual loan program for program-specific requirements such as income limits.

Frequently Asked Questions (FAQs)

  1. Do I qualify for CalHFA programs?
    To determine your eligibility, you can review the information provided under the Borrower Eligibility tab above.
  2. What is the Credit Score requirement?
    Credit score requirements will vary for each program, but the minimum score is between 660 and 680, depending on some other factors. A Preferred Loan Officer can assess your financial situation and tell you what score you’ll need to qualify.
  3. What programs are available?
    CalHFA offers a variety of first mortgage and down payment assistance programs. You can find details on all of these programs under the Loan Programs tab.
  4. What is the interest rate?
    Interest rates will vary depending on your financial circumstances, lender fees, and other factors. Interest rates can also change daily. We recommend that you check with a loan officer to receive an accurate rate quote.
  5. What are the income limits?
    Income limits vary according to program and the county in which the property is being purchased. It’s best to review the individual Program Descriptions to determine the income limit in your area. You can find the details for income limits in the borrower requirements section of each Program Description.
  6. Does CalHFA have sales price limits for the home I want to buy?
    No, CalHFA does not have sales price limits.

MyHome Assistance Program Summary

The MyHome Assistance Program (MyHome) is a deferred payment, simple interest rate subordinate loan that may only be used with a CalHFA first mortgage. Your low to moderate income first-time homebuyer can use this loan for down payment and/or closing cost assistance.

CalHFA allows qualified homebuyers to layer other down payment assistance loans or grants
to maximize affordability.

MyHome must be in 2nd lien position when layering with other programs.

CalHFA CalPLUS with ZIP

CalHFA ZIP is a deferred  payment, zero interest second mortgage that is only available with when used with the CalPLUS first mortgage program.

Offered by the California Housing Finance Agency, this new CalHFA loan program is designed to help well-prepared low to moderate income families become homeowners in California.

CalHFA is committed to providing sustainable homeownership solutions to California families.

ZIP Program Highlights

  • ZIP Assistance is 3% or 4% of the total first mortgage loan
  • Loan Term Matches CalPLUS loan term
  • Zero Interest for life of loan
  • Deferred payments for term of loan

CalPLUS Loan Terms

  • 30 Year Term
  • Follows qualifying guidelines of CalPLUS Conventional or FHA loan programs
  • Has exclusive access to ZIP – Zero Interest Program
  • Can be combined with ECTP – Extra Credit Teacher Program
  • Can be combined with MCC and/or EEM
  • Can be combined with MyHome Assistance Program
  • CalPLUS loans are not subject to a recapture tax

ZIP Program Highlights

  • ZIP Assistance is 3% or 4% of the total first mortgage loan
  • Loan Term Matches CalPLUS loan term
  • Zero Interest for life of loan
  • Deferred payments for term of loan

Property Eligibility

  • Single Family Residence and HUD approved condos
  • Sales Price Limits (varies by county)
  • Owner Occupied Only
  • No Manufactured Housing Allowed
  • 1 Year Home Warranty (except new construction)

Minimum Home Warranty Coverage

  • Water Heater
  • Air Conditioning/Heating
  • Refrigerator, Oven/Stove/Range, Microwave, Washer/Dryer

To get More information on the Many Frist Time Home Buyer programs here in San Diego County, and how we can help you find the Home of your dreams contact Brad or Karen Mattonen = Your San Diego First Time Home Buyer Specialist
bmattonen@gmail.com
858.518.2875

For approved lenders A CalHFA approved Lender will qualify you for a home loan – or contact
us for a referral directly –bmattonenrealtor@gmail.com

HELPFUL WEB LINKS
California (CalHFA) MyHome Assistance Program
http://www.calhfa.ca.gov/homeownership/programs/myhome.pdf
California (CalHFA) Extra Credit Teacher Program
http://www.calhfa.ca.gov/homeownership/programs/ectp.pdf
California (CalHFA) First Mortgage Programs
http://www.calhfa.ca.gov/homeownership/programs/index.htm
California (CalHFA) Mortgage Tax Credit Certificate Program
http://www.calhfa.ca.gov/homeownership/programs/mcc.pdf
California (CalHFA) Income and Sales Price Limits (no approved lenders list – just loan officers)
http://www.calhfa.ca.gov/homeownership/limits/index.htm
California (CalHFA) eHome America Education (online homebuyer education)
http://ehomeamerica.org/calhfa
California (CalHFA) Interest Rates
http://www.calhfa.ca.gov/apps/rates/
California (CalHFA) Lender Training
http://www.calhfa.ca.gov/homeownership/training-outreach.htm

Down payment
money is out there.

We’ll help you find it

Owning your home is the American dream, we can make it come true