CalHFA MyHome Assistance Program
The CalHFA MyHome Assistance Program remains one of the most popular options for first-time buyers throughout California. Rather than providing a grant, the program offers a deferred-payment junior loan that can be used toward the down payment or closing costs. Buyers using a conventional CalHFA first mortgage may receive assistance equal to approximately three percent of the purchase price, while FHA borrowers may qualify for up to three and one-half percent. One of the biggest advantages is that there are no monthly payments on the assistance loan. Repayment generally occurs only when the property is sold, refinanced, or the original first mortgage is paid in full. For buyers who have stable income but haven’t yet accumulated enough savings, this program often bridges the final gap needed to become a homeowner.
CalHFA Dream For All Shared Appreciation Loan
The Dream For All program has become one of California’s most talked-about homebuyer programs because it can provide a substantially larger amount of down payment assistance than many traditional programs. Qualified first-generation homebuyers may receive assistance equal to a significant percentage of the purchase price, dramatically reducing the cash needed to close. Unlike a traditional loan, however, the state shares in a portion of the home’s future appreciation when the property is eventually sold or refinanced. For buyers planning to remain in the home for many years, it’s important to understand that while the program makes homeownership more attainable today, it also means sharing part of your future equity. In many cases, it’s still an excellent tradeoff because buyers are able to enter the market years earlier than they otherwise could.
GSFA Platinum Program
The Golden State Finance Authority Platinum Program offers another outstanding option for buyers seeking down payment assistance. One feature that distinguishes this program is that it is available to many repeat buyers in addition to first-time purchasers. Depending on the loan type and borrower qualifications, buyers may receive assistance of up to approximately five and one-half percent of the loan amount. The program can often be paired with FHA, VA, USDA, or conventional financing and may be used on eligible condominiums, townhomes, and single-family homes. For buyers who have solid income but limited savings, GSFA Platinum frequently provides additional flexibility compared to some other assistance programs.
Federal Home Loan Bank Down Payment Assistance
Many buyers are unaware that assistance is also available through participating lenders working with the Federal Home Loan Bank of San Francisco. These programs periodically offer grants that do not require repayment, provided program conditions are satisfied. Funding is limited and is distributed on a first-come, first-served basis, meaning availability can change quickly throughout the year. Because these programs periodically exhaust their funding, buyers who believe they may qualify should begin discussions with an experienced lender as early as possible.
City and County Homebuyer Assistance Programs
Several Bay Area cities and counties periodically offer their own assistance programs for local residents purchasing within their jurisdiction. These programs vary considerably from one community to another and may include deferred loans, forgivable loans, matching funds, or grants. Income limits, occupancy requirements, and resale restrictions often apply, but they can substantially reduce the amount of cash required to purchase a home. Because funding frequently depends upon annual budgets or grant allocations, availability changes throughout the year.
Can You Use These Programs to Buy a Condo or Townhome?
Fortunately, the answer is usually yes. Most major down payment assistance programs can be used to purchase eligible condominiums and townhomes throughout the Bay Area, provided both the borrower and the property satisfy the lender’s requirements. Buyers should remember that condominium financing introduces another layer of review because the homeowners association itself must often satisfy lending guidelines. Before writing an offer, it’s always wise to confirm that both the financing program and the condominium development qualify.
Are These Programs Really Free Money?
One of the biggest misconceptions surrounding down payment assistance is that every program provides free money. Some do. Others don’t. Certain programs are structured as grants that never require repayment, while others function as deferred second mortgages that become due when the property is sold or refinanced. Shared appreciation programs require repayment of the original assistance along with a percentage of the home’s appreciation. None of these approaches are inherently better or worse than another, but understanding how each program works before committing to one is critical.
Which Program Is Best?
There isn’t a single program that’s right for everyone. Some buyers benefit most from maximizing down payment assistance, while others may be better served by making a slightly larger down payment themselves in exchange for a lower monthly payment or greater long-term equity. The best financing strategy depends on your income, available savings, credit profile, future plans, and the type of home you’re purchasing. A conversation with an experienced loan officer can often identify opportunities buyers didn’t even realize existed.
If you would like a referral to an experienced lender in the San Francisco East Bay that knows the details of all these programs, contact me at 925-451-6679 or dwagley@kw.com and I would be happy to make a referral to a qualified lender.
Derek M. Wagley, Esq Broker Associate at Keller Williams Realty