Down payment assistance programs are administered by the Golden State Finance Authority and are issued through a qualified lender. They provide a set amount of money to qualified homebuyers. Homebuyers can use the money to cover their down payment or closing costs. The money you receive through the program is an interest-free loan that accrues no interest, has no monthly payments, but is due and payable upon sale, refinance or payoff of the First Mortgage.
The process of getting qualified for and using a homebuyer program is similar to any other mortgage application. Qualified lenders are trained on each specific loan assistance program and have the ability to complete financing without delays or prolonged closings.
A lot of people focus on the word “assistance” in down payment assistance, believing it is only for specific homebuyers and “targeted” neighborhoods of very inexpensive homes. In fact, homes in any neighborhood may be eligible. Depending on the type of financing option you choose, there may be loan and income limits.
Not all down payment assistance programs have a first-time home buyer requirement. But for the programs that do, a “first-time homebuyer” is defined as someone who hasn’t owned a home in at least three years. This can make all the difference to applicants who were homeowners more than three years ago and are back in the market today.
Higher income isn’t an automatic disqualifier for Down Payment Assistance. For some programs, income limits are based on household size, so limits for a family of five are significantly higher than for a single person. Additionally, bonus or commission income earned does not necessarily disqualify you from these programs.
Your first step is to contact a Participating Lender for approval. Fill out the form on the previous page to be contacted by an approved lender within 24 hours.
