Orange Cty Down Pymt Assistance & MCC Tax Credit - 1st Time Homebuyers

First time homebuyers in Orange County CA have an opportunity to take advantage of two great programs designed to help them purchase a home.

A combination of 3% CHDAP down payment assistance offered through CalHFA combined with a Mortgage Credit Certificate that allows 15% of the mortgage interest to be used as a tax credit, together with an FHA loan makes it possible for a renter in Orange County to purchase a home with minimal out of pocket expenses.

Now, I am not advocating that we return to the good old days of leveraging ourselves into bankruptcy or foreclosure...however, for those 1st time homebuyers who are genuinely ready to own a home and disciplined enough to understand the responsibility that comes with homeownership, these programs can be a huge help in stepping on to the first rung of the property ladder.

For example, let's say a single parent of one child earns $60,000 annually and is currently living in a 2 bedroom 2 bathroom apartment here in Orange County.  The rent is likely to be $1,750 per month or more.

If this single parent chooses instead to purchase a Single Family Home for $299,000 (I am using data from an actual, active listing in Placentia, CA) then the $2,064.00 house payment (PITI and MIP) utilizing the tax deduction and mortgage tax credit amounts is almost the equivalent of the $1,750 rent payment.

So, how does this work?

Purchase price:                                                                                                  $299,000

CHDAP Down Payment Assistance (3% of purchase price):                                     <$   8,700>

Buyer Down Payment Contribution:                                                                     <$   1,495>

   FHA Loan Amount (including 1.75% up front mortgage Ins):                                 $293,584

Monthly Payment (PITI & MIP) @ 3.75% Int (3.891% APR):                                 $    2,064

Est Tax savings realized due to tax deductions (mort int an prop tax):                <$      150>

Est Tax Savings realized due to 15% mortgage tax credit:                                 <$      136>

   Payment, net of estimated savings:                                                               $   1,778

Now I'm no longer a tax preparer and the above numbers are estimates for illustration only only that are designed to help a renter understand how utilizing the assistance available can help them become a homeowner.

For more information or to find out if you can benefit from using these programs to help you move from renter to homeowner, please contact me at (714) 403-2603 or email a message to me at Linda@LindaOnLending.com.