Down Payment Assistance Programs - San Diego

Down Payment Assistance Programs - San Diego.

One of the biggest obstacles in buying a house is saving enough money for a down payment.  FHA loans require 3.5% of the purchase price for the down payment.  On a $400,000 purchase that is $12,000, but you also need money for the closing costs and pre-paid expenses which include taxes, insurance, pre-paid interest and private mortgage insurance if you have less than 20% for the down payment.  Total those items up and you need approximately an additional $12,600 for closing costs.

Here's how those numbers break down

Purchase price   -        $400,000

3.5% down payment -  $12,000

Est. Closing costs    -     $12,600

Amount needed      -      $24,600. 

Often buyers can ask for the sellers to pay their closing costs ( sometimes they say yes).  Although FHA only requires 3.5% for the down payment the more money a buyer can pay toward the purchase price the lower their monthly payment.

There are many down payment assistance programs in both the city and county of San Diego.  A key home assistance program is the Shared Appreciation loan program which allows buyers to obtain up to 17% of the purchase price toward down payment assistance.

In the example above a buyer with only 3.5% down payment would have a monthly payment of approx. $2700.00.  If they used the Shared Appreciation loan program and received 17% or $68,000 for their down payment their monthly payment would only be approx. $2400.00 - a savings of $300 a month or $3600/year.

Down payment assistance with the Shared appreciation loan program details

Must be 1st time home buyer ( no home ownership in the last 3 years)

Maximum income limits are Family of

1 $44,000

2 $50,250

3  $56,550

4 $62,800

5 $67,850

6 $72,850

Shared Appreciation loans have a 30 year term

No monthly payments of principal or interest are required.

If the owner remains in the property for a full 30 years and has complied with  the terms and conditions of the loan,  the shared appreciation provision will be forgiven. 

After 30 years only the npaid principal balance will need to be repaid.

This down payment assistance program can really help buyers reduce their monthly payments and potential be able to buy a more expensive home.  Eligible properties are all single family homes, townhomes and condominiums located within the City of San Diego.  The maximum purchase price is $451,250.

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