Buying a new house within the current housing market is easier than ever. With the economic crisis came an overall drop in property prices and a more widespread availability of houses for sale, and the state of California was no exception. If you live in California and are interested in buying a new home for the first time, you might want to know about two California first time home buyer programs that are available to help people purchasing a home for the first time in their life.
The California Housing Finance Agency
The California Housing Finance Agency was created over 35 years ago and was designed primarily to help Californians with lower incomes to purchase homes. CalHFA created a number of first time home buyer programs that provided lower interest rates, down payment assistance, and other reductions to these people. Two of the main programs offered by CalHFA are the CalHFA FHA loan program and the Homebuyer's downpayment assistance program. Both of these are geared towards first time home buyers with low to moderate income levels, and these income qualification criteria will vary between counties. Here is some basic information on both programs.
The CalHFA FHA Loan Program
Are you looking for an affordable mortgage with a low interest rate? The Federal Housing Association offers a variety of FHA-insured mortgages where you only need to pay a down payment of 1.5% of the loan. Up to 96.5% of the total appraised value or price of the home you want to purchase can be financed through the CalHFA FHA loan program. This program is a staple for low income Californians, and many people are encouraged to purchase an FHA-approved mortgage as a way to lower costs associated with purchasing a new home. You might want to take a run at the California Housing Finance Agency's official site for further details.
The California Homebuyer's Downpayment Assistance Program
The CHDAP can be combined with the above mentioned FHA loan program to help first time home buyer's offset the burden of having to pay a full-on down payment. The CHDAP offers up to 3% of the total price of the home being purchased but also obligates the borrower to put in around 1% of the purchase price in full. The CHDAP makes it much easier for people who do not have a lot of capital to make a large down payment to still buy a home. Additionally, there are certain areas where home buyers can purchase a home and receive assistance for a down payment up to 5% of the sales price of that particular property.
Financial Assistance for California Home Buyers
Buying a home in California can be more cost effective if you choose to use one of the programs offered by the California Housing Finance Agency. These programs are designed to help everyday Californians purchase a new home without having to carry a heavy burden involving a full-on down payment and higher interest rates. Consider using one of the above-mentioned programs if you want to lower costs.