First Time Home Buyer Programs in California 2023
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If you are looking to buy your first home in California, the California Housing Finance Agency (CalHFA) offers a variety of programs that can help you secure a mortgage with competitive mortgage rates, cheaper mortgage insurance premiums, and down payment assistance. CalHFA is an independent government agency within the California Department of Housing and Community Development that aims to provide safe, decent, and affordable housing. They also offer their version of federal housing programs that provide additional benefits compared to the original federal programs. You can use a California Mortgage Calculator to see what mortgage loan may work better for you.
First-Time Home Buyer Eligibility Calculator
California State Programs | |||
|---|---|---|---|
| No | Program | Type | Jurisdiction |
| 1 | CalHFA Conventional Loan Program | Main Programs | California State |
| 2 | CalPLUS Conventional Loan Program | ||
| 3 | MyHome Assistance Program (MyHome) | Optional Add-On | |
Federal Programs | |||
| No | Program | Type | Jurisdiction |
| I | CalHFA and CalPLUS FHA Loan Programs | Federal Housing Administration | Federal |
| II | CalHFA VA Loan Program | US Department of Veterans Affairs | |
| III | CalHFA USDA Program | U.S. Department of Agriculture | |
California State Programs
Main Programs
CalHFA offers two main programs that target first-time home buyers: CalHFA Conventional Loan Program and CalPLUS Conventional Loan Program.
To qualify for these programs you must meet certain basic eligibility requirements:
- You must be a first-time home buyer and eligible to purchase property within the U.S.
- You must have a minimum credit score of 660
- You must meet maximum income limits
- The property must be within California and it must be your primary residence
- The property land must be a maximum of 5 acres
- You must take a mandatory home buyer education course
1. CalHFA Conventional Loan Program
The CalHFA Conventional Loan Program offers a 30-year mortgage targeted toward first-time home buyers. The mortgage rate is fixed throughout the 30-year term. The mortgage rate you receive will vary depending on your financial circumstance, the lender, and the current benchmark rates like the Prime Rate, which is linked to the Federal Funds Rate. These loans are privately insured on the conventional market, so you should expect higher private mortgage insurance premiums than government-insured loans. This program does not offer any unique benefits, so you should consider CalHFA’s other programs if you qualify. However, like their other programs, first-time home buyers are eligible for MyHome.
CalHFA does not issue these mortgages itself but offers mortgage products through private loan officers who are approved and trained by CalHFA. To learn more about this program visit the CalFHA Conventional loan page and to apply, contact a CalHFA loan officer.
2. CalPLUS Conventional Loan Program
The CalPLUS Conventional Loan Program is just like the CalHFA Conventional Program but it has two differences:
- The mortgage rate is slightly higher but remains at a fixed rate throughout the 30-year term
- Mortgages are combined with the CalHFA Zero Interest Program (ZIP) to assist with closing costs
Exclusive to CalPLUS loans, ZIP is a supplementary program that gives borrowers a zero-interest second mortgage for either 3% or 4% of the primary mortgage with deferred payments. Using the 4% option will result in a slightly higher mortgage rate on your primary mortgage. You do not need to make any payments on the ZIP loan itself and will not be charged any interest expense. However, if you sell your house, refinance, repay, or end your mortgage contract in any way, you must repay this loan in one lump sum payment. You can use MyHome with ZIP if you need additional up-front payment assistance.
This product is available through the same loan officers that the original program uses. To learn more about this program visit the CalPLUS conventional loan page and to apply, contact a CalHFA loan officer and specify that you want a CalPLUS Conventional Loan.
Optional Add-On
CalHFA offers an optional add-on program to help with down payments and closing costs: MyHome Assistance Program (MyHome).
3. MyHome Assistance Program (MyHome)
The MyHome Assistance Program (MyHome) offers a junior loan exclusively to first-time home buyers to help meet the minimum down payments and pay for closing costs. This loan does not need to be repaid until you sell your house, refinance, repay, or end your mortgage contract. MyHome is available as an optional add-on to all of CalHFA’s other mortgage programs. Depending on the primary loan, the terms of MyHome differ:
- FHA Loan: MyHome offers up to the lesser of 3.5% of the home purchase price and the appraised value with a cap of $10,000.
- USDA Loan / Conventional: MyHome offers up to the lesser of 3% of the home purchase price and the appraised value with a cap of $10,000.
- VA Loan: MyHome offers up to the lesser of 3% of the home purchase price and the appraised value.
To learn more about this program and for details on how to apply, visit CalHFA’s official website.
Federal Programs
CalHFA offers versions of targeted Federal Programs through its agencies with lower mortgage rates and other benefits. These include the CalHFA and CalPlus FHA Loan Programs, CalHFA VA Loan Program, and CalHFA USDA Program.
I. CalHFA and CalPLUS FHA Loan Programs
The CalHFA and CalPLUS FHA Loan Programs operate similarly to the Conventional Loan Programs. The PLUS program has a slightly higher mortgage rate than the standard program but it is complemented by the CalHFA Zero Interest Program to help with closing costs. These programs offer a 30-year fixed-rate mortgage at a low-interest rate, except these loans are insured by the Federal Housing Administration (FHA), which is a U.S. federal government agency allowing you to get low FHA mortgage rates and FHA mortgage insurance premiums (MIP). These programs are also targeted toward low to moderate-income earners and have lower eligibility requirements than other loans. To determine your monthly mortgage payment use our FHA loan calculator and for more information and eligibility requirements, visit the FHA Loans page.
II. CalHFA VA Loan Program
The CalHFA VA Loan Program offers a CalHFA interest rate first mortgage insured by the United States Department of Veterans Affairs (VA) to certified veterans. These 30-year fixed-rate mortgages are guaranteed by the VA, so they offer lower mortgage rates than conventional loans. The primary benefit of a VA Loan is that there is no minimum down payment. You only need to pay the difference between the home’s purchase price and market value. To determine your monthly mortgage payment use our VA loan calculator and for more information and eligibility requirements, visit the VA Loans page.
III. CalHFA USDA Program
The CalHFA USDA Program offers first mortgages insured by the United States Department of Agriculture (USDA). The USDA provides insurance for 30-year fixed-rate mortgages on properties within locations designated as rural areas and these loans have lower borrower requirements. Since the USDA is a government agency, you can also expect competitive mortgage rates. Additionally, you can combine this loan with the MyHome program to help pay for your minimum down payment or closing costs. For more information and eligibility requirements, visit the USDA Loans page and USDA Eligibility Map page.