The Lowdown on Down Payment Assistance...
What is Down Payment Assistance?
- When buying a home, you typically pay a percentage of the home’s value upfront.
- Average down payment: ~6% of loan value (sometimes as low as 3% depending on loan type and credit score).
- Down Payment Assistance (DPA) programs provide grants or loans to cover some or all of this cost.
How to Get Down Payment Assistance
- Start with a pre‑approval to determine how much assistance you may need.
- General qualifications (vary by state/lender):
- Credit score of 660+
- First‑time homebuyer
- Home must be your primary residence
CalHFA Down Payment Assistance
- Offers a subordinate loan with deferred payments (“silent second loan”).
- Funds can cover down payment, closing costs, or both.
- Repayment occurs when you sell, refinance, or finish paying off your mortgage.
Types of CalHFA Assistance:
- MyHome (FHA loans): Up to 3.5% of purchase price/appraised value.
- MyHome (Conventional loans): Up to 3%.
- Zero Interest Program (ZIP): For closing costs only.
- California Dream for All (coming soon): Shared appreciation loan to reach 20% down, reducing mortgage size and avoiding PMI.
Eligibility:
- First‑time homebuyer in California (exceptions apply).
- U.S. citizen, national, or qualified alien.
- Must occupy the property.
- Meet credit/income requirements.
- Complete a homebuyer education course.
GSFA Platinum Program
- Not limited to first‑time buyers.
- Provides up to 5.5% of the first mortgage loan amount for down payment and/or closing costs.
- Flexible credit (FICO as low as 640) and income limits.
- Eligible properties: 1–4 unit residences, condos, townhomes, manufactured homes.
- Works with FHA, VA, USDA, and Conventional loans.
Program Options:
- Platinum Standard: Up to 5% assistance via a 15‑year second mortgage (same interest rate as first mortgage).
- Platinum Select: For certain occupations/loan types. 3.5% second mortgage + up to 1.5% gift (no repayment).
- Assist‑to‑Own: For county employees. 3.5% deferred second mortgage (0% interest) + up to 2% gift.
Key Takeaway:
Down Payment Assistance programs like CalHFA and GSFA Platinum can significantly reduce upfront costs, making homeownership more accessible. Each program has unique eligibility requirements, loan structures, and repayment terms.
Do I Qualify?
As a rule of thumb, it may be harder to qualify for fixed-rate loans than for adjustable rate loans. When interest rates are low, fixed-rate loans are generally not that much more expensive than adjustable-rate mortgages and may be a better deal in the long run, because you can lock in the rate for the life of your loan.
- Fixed Rates
- Conforming Loans
- Jumbo & Super Jumbo Loans
- FHA, VA, & USDA Loans
Get Your FREE Down Payment Assistance Rate Quote Now!