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California First-Time Homebuyer Programs

By Elizabeth R. Elstien

California Housing Finance Agency (CalHFA) has a number of programs for first-time homebuyers to pave the sometimes rocky road to homeownership. Buyers purchasing a home in areas federally designated targeted areas, where 70% of families residing in each area earn 80% or less of the state income median, are also eligible for these loan programs. From fixed-interest rates to down payment assistance and programs for teachers and school employees, learn which program could help with your first-time California home purchase.

For those having trouble saving money for closing fees, inspections and other home purchasing costs, look into an Individual Development Account (IDA) in your area. An IDA aids potential homebuyers work toward a home purchase through a savings plan/account. The account may match savings by as much as 3:1, so for every $1 put into the special savings account by a potential homebuyer, $3 is contributed to the savings account by various nonprofit organizations and banks.


CalPLUS Loan Program

A special FHA-insured loan for a first mortgage that offers fixed-rate interest for 30 years. This loan goes together with the CalHFA Zero Interest Program (ZIP) that helps with down payment assistance.

CalHFA FHA Loan Program

Similar to the CalPLUS Loan Program, this program also has a 30-year term with a fixed-rate interest, but can be used together with one of two programs: California Homebuyer Downpayment Assistance Program (CHDAP) or the Extra Credit Teacher Program ECTP) described below.


California Homebuyer's Downpayment Assistance Program

This loan type is considered a "silent second", so no payments are made on this second loan until the home is sold, refinanced or paid in full. Payments are only made on the first mortgage loan keeping monthly mortgage payments affordable and avoiding default. This CHDAP loan is for down payment and/or closing costs with a loan amount of the lesser of 3% of the purchase price or its appraised value.

Extra Credit Teacher Home Purchase Program

The ECTP is also a "silent second" loan, used for down payment, made to "teachers, administrators, classified employees and staff members working in high priority schools in California." The amount given is 3% of the sales price but not greater $7,500. In what CalHFA defines as high-cost areas, the amount loaned cannot exceed $15,000.


Preferred loan officers are approved and trained by CalHFA and are the only ones who can help with the CalHFA loans for first-time homebuyers. These loan officers know the ins and outs of the CalHFA loans and will help you through the loan process.

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About The Author

Elizabeth R. Elstien has worked in real estate for over 15 years as a real estate...

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