Buying using low Down Payment or Assistance programs in California

Being first time home buyer can be very challenging and stressful especially in California where home prices have been soaring and are out of reach for many buyers.  Luckily, there are programs to help you with getting into a home with very little or possibly with Zero down payment.  Some of these programs apply not just to first time home buyers but also for people that have owned a home in the last 3 years.  A first time home buyer is defined as someone who has not had any ownership of a home (primary, investment, second home) in the last 3 years.

California low and no down payment programs

If you’re a first time home buyer that has a substantial down payment, at least 5% plus closing costs typically 2%-3% of the purchase price, a down payment assistance program will most likely NOT provide any benefit to you. This is especially true for anyone with at least 20% down payment as you would get a loan without any PMI (private mortgage insurance). However, if you’re struggling coming up wth a down payment, here’s a list of severl loan progams to help you get into a home with very little or no money out of pocket.

• Conventional 97% Financing: If you’re a first time home buyer, you could qualify for a loan with as little as 3% down payment. Although these programs allow credit scores as little as 620, typically buyers with high credit scores over 700 benefit from using this program.  Lower credit score buyers benefit more using and FHA loan.  Available in every state.
• FHA 96.5% Financing: Backed by the Federal Housing Administration, you could qualify for an FHA loan with as little as 3.5% down payment.  Typically, lenders require a 620 credit score but you could contact a mortgage broker who can work with a lender to go down to as low as 580 credit score. No first time home buyer requirement, available in every state.
• VA 100% Financing: This loan is only for Veterans, active-duty service members and surviving spouses.  This is by far the best loan program as it offers very low rates, 100% financing, flexible underwriting and no PMI (private mortgage insurance). No first time home buyer requirement, available in every state.
• USDA 100% Financing: This program is designed for rural areas.  It is one of the hardest programs to qualify for as it is geographically restrictive and has harder income qualifications.  However, it does offer loans up to 100% of the price of the home and offers low rates with reduced PMI. No first time home buyer requirement, available in every state.
• CalHFA mortgage programs: These are loan programs offered through California Housing Finance Agency. These programs offer down payment assistance to first time buyers and include Conventional, FHA, VA and USDA loans.

• • • Be an eligible first-time home buyer
    • Complete a home buyer education course
    • Meet CalHFA’s median income limits
    • Have a minimum credit score of 660-680, depending on the program
    • Purchase a primary residence within the state of California
    • New Dream For All down payment assistance with Shared Equity Program
• Empower – similar to CalHFA, this program is a specialty product offered by one of our lending partners.  It has more flexibility over CalHFA without having a first time buyer requirement and the assistance is FREE non repayable grant. Please contact us directly for more details and program availablity.

How to apply for one of these low down payment or assistance programs?

The best way to find out which program is best for you is to contact a loan officer and Unified Home Loans and go over your personal situation.  The consultation is free, and we’ll be able to navigate you through the complex loan programs to make sure we find the one that suits you the best!