First-Time Homebuyer Programs and Incentives for Californians in 2024
Buying your first home? We understand the challenges. The competitive real estate market in the Golden State can make the prices very high. Thankfully, you can seek a first-time home buyer program for a loan to offer you an extra hand. In 2024, you can avail of various incentives to make your purchase smoother. Here is what you should look for.
CalHFA First-Time Homebuyer Programs
CalHFA, or the California Housing Finance Agency, has several programs to help first-time homebuyers get their dream home.
CalHFA First Mortgage Loan Programs
Explore various first mortgage loan programs providing affordable financing options. These loans have lower interest rates and flexible terms, unlike conventional loans. The options include:
- CalHFA FHA Loan Program: The Federal Housing Administration (FHA) backs this program, which offers easier credit qualifications and lower down payment requirements.
- CalHFA VA Loan Program: This loan is designed for active-duty military personnel and veterans and provides benefits like no mortgage insurance (PMI) and no down payment.
- CalHFA USDA Loan Program: Homebuyers in eligible rural areas can get this loan. It offers 100% financing with no down payment requirements.
CalHFA MyHome Assistance Program
This program provides a deferred-payment junior loan of about 3.5% of the home’s appraised value or purchased price, whichever is less. You can use it to close costs or down payments. The MyHome Assistance Program simplifies buying your first home.
CalHFA Zero Interest Program (ZIP)
It provides a zero-interest deferred-payment loan you can use for closing costs. The ZIP program does not need monthly payments and is only due when the home is refinanced, sold, or paid off. You can combine this program with other CalHFA first mortgage loan programs for extra savings.
Mortgage Credit Certificate (MCC) Program
The MCC is a federal program that enables first-time homebuyers to get a tax credit for a portion of the mortgage interest paid annually. It offers substantial tax savings, making buying your dream home affordable. Local Californian government agencies administer this program.
What do you need to qualify for the MCC program? You must meet specific income and purchase price limits. You must use the home as your primary residence. You can claim the MCC tax credit every year as long as the loan lasts.
Local First-Time Homebuyer Programs
Apart from state-wide programs, many Californian counties and cities offer their own first-time homebuyer assistance programs, with notable examples being:
- Los Angeles County: It offers the HOP or Home Ownership Program, which gives down payment assistance as a second mortgage. It is meant for moderate and low-income families and offers deferred payments with 0% interest.
- San Francisco: The Mayor’s Office of Housing and Community Development (MOHCD) in San Francisco offers various programs, such as the First Responders Downpayment Assistance Loan Program (FRDALP) and the Downpayment Assistance Loan Program (DALP). These programs provide financial assistance to first-time homebuyers with their down payment and closing costs.
- San Diego: The San Diego Housing Commission offers the First-Time Homebuyer Program, which gives deferred loans and closing cost help to moderate and low-income homebuyers. This program by the SDHC is designed to make a first-time homebuyer in California afford their first home without worrying.
Federal Programs and Incentives
You can also check the various federal programs and incentives, like the:
- Federal Housing Administration (FHA) Loans: This first-time homebuyer program is very popular because its loans offer low down payment options, which can be as low as 3.5%. The credit requirements are lenient, and these loans are backed by the federal government, so they are less risky for lenders.
- S. Department of Veterans Affairs (VA) Loans: VA Loans, as the name suggests, are for veterans, active-duty service members, and eligible surviving spouses. They offer various benefits, such as competitive interest rates, no PMI, and no downpayment.
- S. Department of Agriculture (USDA) Loans: These are for homebuyers in eligible rural areas. They offer 100% financing, which means you don’t need to pay down payments. They come with low interest rates and reduced mortgage insurance costs.
The Takeaway
We understand that the first homebuying process can be daunting, but it is manageable with the right programs and incentives. California has a wealth of resources for first-time homebuyers, whether you need state, local, or federal assistance programs. Explore the opportunities and make your dream home yours. If you need a first-time home buyer mortgage, consult ALT Financial Network, and we will help you get your first abode.
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