By Theresa A. Parker
Everyone knows how expensive it is to buy a home in California. Fewer people may be aware that there is plenty of help to be found for moderate and low-income first-time buyers - even in Los Altos.
Great places to start are your local city and county redevelopment agencies or housing authorities. Another is with a non-profit housing organization; many offer different types of homebuyer assistance loans and grants.
One way to leverage assistance is by layering. Many supporting grants and loans can be added together, sometimes as many as four or five programs deep, thereby covering many up-front, out-of-pocket expenses when purchasing a house.
Sound too good to be true?
That’s where the state’s affordable housing bank, the California Housing Finance Agency (CalHFA), can help. Last year alone, the agency assisted more than 6,000 families with their homeownership dream, using more than $1.2 billion in nontaxpayer money.
CalHFA offers a dozen different down-payment assistance programs, and partners with more than 250 cities, counties and other housing organizations to provide down-payment and closing cost assistance for first-time homebuyers.
Earlier this year, CalHFA introduced the interest-only PLUS loan program, which can reduce mortgage payments by hundreds of dollars per mont borrowers pay interest only for the first five years of a 35-year, fixed rate mortgage loan.
Unlike other interest only loan programs that have rates that can balloon after the interest-only period, this loan comes with a guaranteed low, fixed interest rate for the entire 35-year term.
Best of all, homebuyers can combine a traditional 30-year below market rate loan or the interest-only PLUS loan with multiple down payment programs.
Taking advantage of multiple programs at the state and local level can be key, especially given that the most recent figures from the California Association of Realtors show median home prices statewide now top $500,000.
Recently, one Bay Area person bought a $300,000 house, but is only paying a first mortgage of $176,000. How? Two local programs contributed $90,000, CalHFA’s down-payment programs added another $34,000 for a total of $124,000 in assistance.
Even in the best of circumstances, buying a home is a scary undertaking, but with a little extra research, first-time homebuyers can find resources to help them meet the challenge. State and local programs continue to do everything they can to make sure the dream of homeownership stays alive for all Californians.
Theresa A. Parker is the executive director of the California Housing Finance Agency. For more information about CalHFA and its first-time homeownership programs visit www.calhfa.ca.gov or call (800) 789-2432.
