Important things to Know about Qualifying for Down Payment Assistance Programs in California

Many cities, counties and federal government programs exist to provide down payment and closing cost assitance for new home buyers. 

Down Payment Assistance Programs allow home buyers to borrow money for the down payment which results in lower payments, more purchasing power, reduced or eliminated mortgage insurance and may also be used to cover closing costs.

This is a quick overview of the most common types of Down Payment Assistance Programs and what the most common features of these programs are:

• Must be a first time home buyer - have not owned a home in past 3 years
• Must meet income limitations - these limits range from 80%  to 120% of the Area Median Income
• Silent Second - No monthly payments during qualifying period
• Low or no interest rates
• May be forgiven at end of term (usually 30 to 45 years) - converts to grant
• Repayment is based on low, simple interest rate
• Must be paid back if you rent, sell or take cash out of a refinance
• Must be owner occupied
• Requires home ownership counceling or community service
• Can require minimum of $1,000 up to 3% down payment from buyer
• Have geographic restrictions based on coverage of program
• Subject to approval by providing agency - family must "have a need" for program to qualify

Common Down Payment Assistance Programs are:

• Down Payment Assistance
• Down Payment Gifts/Grants
• Mortgage Credit Certificates
• Down Payment and Closing Cost Assistance

Consult your Realtor about DPA programs available to you in the area you wish to buy in.  Many times programs will allow you to "stack" Down Payment Assistance programs to a maximum of 100% Loan to Value.

To search homes in your County that may qualify for Down Payment Assistance - Use this Free Membership to Listingbook.  This is a free service that allows you to search the same MLS system that Realtors use to list properties for sale.