San Diego is known for its high housing costs, although that doesn’t deter people from moving to the area and buying a home. For first time home buyers, prices and choices can be overwhelming, and for lower-income buyers, the high cost of living may seem insurmountable. The state of California and the Department of Housing and Community Development in San Diego County provide several options for first time home buyers to help ease the burden.
The Down Payment and Closing Cost Assistance Program is available for low-income home buyers whose gross annual income is less than 80 percent of San Diego County’s Area Median Income (AMI). Assistance is offered in the form of a low-interest, deferred payment loan of either 33 percent of the purchase price or $70,000, whichever is less. The funds, once received, can be used to make a down payment or pay the closing costs.
The program is available for specific property types including single family residences, condos, townhouses, and manufactured homes as long as the homes are secured to a permanent foundation. The appraised value can’t be higher than $451,250 for single family homes, $312,000 for re-sale condos and townhouses, and $377,000 for new condos and townhouses.
The Mortgage Credit Certificate Program makes mortgage qualification easier for first time home buyers by reducing their federal income tax level by 20 percent of the annual interest paid on the mortgage. This program is only eligible for single family homes, condos, townhouses, and manufactured homes secured to a permanent foundation.
First Time Home Buyer Programs in California
The California Housing Finance Agency (CHFA) offers several programs for first time home buyers to help them make the dream of homeownership a reality. CHFA offers conventional loans, government loans, and assistance programs that San Diego County residents can use.
The CalPLUS Conventional Loan Program and the CalHFA Conventional Loan Program both offer 30-year mortgages for qualified borrowers. The CalPLUS is fully amortized and can be combined with the CalHFA Zero Interest Program (ZIP) to offer down payment assistance. The CalHFA is a fixed interest mortgage.
The CalPLUS FHA Loan and the CalHFA FHA Loan are both similar to their conventional loan counterparts. The difference is that the Federal Housing Authority (FHA) insures the loans. The Cal-EEM + Grant Program helps home buyers who want to make energy efficient improvements to their home.
Down Payment Assistance
The California Homebuyer’s Downpayment Assistance Program (CHDAP) allows first time home buyers to borrow three percent of the purchase price or the appraised value of their home, whichever is less, to use towards a down payment or the closing costs
The Extra Credit Teacher Home Purchase Program (ECTP) helps teachers and other school and school administration employees that work in high priority schools throughout California. San Diego is a location that qualifies for this program. The program awards first time home buyers a junior deferred loan of up to 3 percent of the sales price to be used for a down payment.
San Diego County may be known for high housing costs, but between the county and the state of California, first time home buyers can expect some assistance and relief. When you’re ready to buy your first home, contact us so we can help you find the program that’s right for you.