Down Payment Assistance Programs in California
Saving enough money to buy a home can be overwhelming — but for some buyers, there may be help in the form of down payment assistance loans. Currently, WCC makes available the following down payment assistance programs in California.
The California Housing Finance Agency (CalHFA) is a self-supporting state agency that offers multiple down payment assistance programs for eligible homebuyers. They include the MyHome Assistance Program, which is a deferred-payment junior loan for up to 3.5% of the purchase price or appraised value to cover either down payment or closing costs. Another CalHFA program, CalPLUS, is an FHA-insured first mortgage that is combined with the CalHFA Zero Interest Program (ZIP) in order to cover the buyer’s closing costs.
CalHFA Income Limits, Minimum Credit Score
There are income limits for CalHFA down payment assistance programs. However, these limits are dependent on county rather than household size. The minimum credit score on all CalHFA loans is 640, or 660 for manufactured homes. All CalHFA programs are for first-time homebuyers; however, the agency defines first-time homebuyer as someone who has not owned a home they have occupied for the last three years.
CalHFA School Teacher and Employee Program
CalHFA also offers a School Teacher and Employee Assistance Program for public school employees. The program is for teachers, administrators, school district employees and staff members working for any California K-12 public school, including charter schools and county/continuation schools. This is a junior loan for up to 4% of the purchase price, and can only be combined with an eligible CalHFA first mortgage loan.
GSFA Platinum Program
The Golden State Finance Authority (GSFA) administers programs that provide financing for residential home purchases, including down payment assistance programs. The GSFA Platinum Program, one of the most popular down payment assistance programs in California, was created to help low-to-moderate income homebuyers in the state purchase a home by providing down payment and/or closing cost assistance. Eligible borrowers may receive up to 5% of their total loan amount to use toward down payment and closing costs. This is done as a “silent second” (no payments due and forgiven after three years).
GSFA Platinum Income Limits, Minimum Credit Score
Unlike CalHFA programs, GSFA Platinum does not feature a first-time homebuyer requirement. The minimum credit score on GSFA Platinum is 640. GSFA Platinum income limits are determined by county, not household size.
CalHFA and GSFA Platinum are both down payment assistance programs in California only. By contrast, Freddie Mac’s Home Possible® program is a low down payment program available in all 50 states. Its low down payment options range from 3% to 5%, and the down payment can come from a variety of sources including family, employer-assistance programs and secondary financing. Depending on various factors, income limits may be applicable; ask your loan officer for details.
No Down Payment Loans | VA Loans, USDA Loans
Although they are not regarded as down payment assistance loans, there are two zero down payment loans available to eligible borrowers. Military homebuyers may apply for a VA loan, which offers no down payment, no private mortgage insurance requirements and limited closing costs. Applicants for VA loans must present a Certificate of Eligibility (COE) in order to qualify, and other underwriting guidelines may apply. For those buying a home in a rural area, another no down payment loan option may be a USDA loan. Certain restrictions may apply; please ask your loan officer for details.
Alternatives to Down Payment Assistance
Those who do not qualify for down payment assistance loans may still have low down payment options available to them. A loan backed by the Federal Housing Administration (FHA) loan requires a minimum down payment of 3.5%. At Wholesale Capital Corporation, the minimum credit score for an FHA loan is 580.
To learn more about the options discussed here – including down payment assistance programs in California, no down payment loans through VA or USDA, or low down payment FHA loans – please contact Wholesale Capital Corporation. We will be happy to connect you to a loan officer.