While 2013 has slowly become a great year for sellers with rising home prices, it is still a great time to be a first-time homebuyer. Though prices have risen around the state, and bidding wars have returned to some housing markets, buyers still enjoy historically low rates and a variety of options that can make buying a first home much less of a struggle than you might think.
Luckily for California first-time homebuyers, there are plenty of programs that are geared to help with the purchase of a first home, from grants to tax credits and loans for new buyers.
New American Funding has home loan experts that specialize in first-time homebuyer programs and are knowledgeable about all the resources that new buyers will have access to. They can help you decide whether a conventional loan or an FHA loan is your best choice. If you’re a veteran or active-duty military looking to buy your first home, an expert can help you with a VA loan program specifically designed for military personnel and their families.
Down Payment Assistance
In January 2013, the California Housing Finance Agency (CalHFA) reinstated the California Homebuyer’s Downpayment Assistance Program (CHDAP), a homebuyer grant intended for low-to-moderate income homebuyers. CHDAP provides a secondary loan of up to 3% of the home price that can be used to assist with a down payment or closing costs on the house.
Unlike other down payment assistance programs, CHDAP does not require the participation of the seller, which opens up your home choices. Combined with an FHA loan, CHDAP can allow first-time homebuyers to potentially buy a home with no initial down payment. Interest rates will depend on income level and the lender you choose. New American Funding is a CHDAP-approved lender.
First-time Homebuyer Tax Credits
Many buyers assumed that the tax credit offered to first-time homebuyers was the end of new home purchase tax credits, but the federal Mortgage Credit Certificate Tax Credit (MCC) allows borrowers to convert money spent on their annual mortgage interest payments to a credit on their income tax returns. CalHFA works directly with individual counties to provide the federal tax credit, but each county sets a sales price limit that will impact your eligibility for the loan. While there may be a fee to apply for the credit, the credit will last for the duration of the loan or at least as long as you are required to pay mortgage insurance.
California First Time Homebuyer Grants
Though California does not offer grant money, there are a number of county-level programs and private programs that are designed to give assistance to residents looking to buy their first home. The US Department of Housing and Urban Development offers a county-by-county list of resources for first-time homebuyers in California.
If you know a Californian, or future Californian, that is interested in taking their first step toward becoming a homeowner, please share this blog with them!