Soaring real estate prices make California a challenging place for many people to become first-time home buyers. A new home loan program may make the process easier for some buyers.
How does the program work?
Forgivable Equity Builder Loan program
First-time homebuyers can apply for an interest-free forgivable loan for up to 10% of the price of the home they want to buy. Qualified buyers can use these loans to cover their down payment or closing costs. The borrower must live in the home for at least five years to qualify for loan forgiveness.
Borrower qualification requirements
To qualify for the program, buyers must meet several requirements:
- Income below 80% of the median income in the county where the property is
- Home purchase must be for a primary residence
- Must be a first-time homebuyer
- Must obtain a certificate of completion for a homebuyer education counseling program through an eligible homebuyer counseling organization
- Must have a first mortgage with the California Housing Finance Agency
Property qualification requirements
The property must be a single-family, one-unit residence. Granny units, guest houses, manufactured houses and in-law quarters may qualify. Condominiums must meet first mortgage guidelines.
What you need to apply
You can apply for one of these loans through an agent approved by the California Housing Finance Agency. You need your recent pay stubs, job history, bank statements and tax returns.
If a lack of down payment is preventing you from becoming a homeowner in California, this program may be an option for you.