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First Time Home Buyer Programs in SoCal

By Colleen Colkitt

If you're buying a home for the first time you might not know which programs you qualify for. Also, even if you're not buying your first home, but it's your first home in the last three years, you qualify for first time buyer programs as well. In addition to this, if you are a veteran or possibly purchasing a home in a federally designated area, you might also qualify for first time homebuyer assistance.

To meet the requirements for programs in California, one must be a U.S. citizen located in California and the home you're interested in must be your primary residence. There are different sales price limits, but these can be applied to not just homes, but also condominiums, apartments, and all types of properties.

California FHA

Federal Housing Administration, or FHA, loans have targeted areas by the Federal Government. It includes the 70% of families who live in areas that earn an income of 80% or less than the statewide median income. Many of the areas in LA County have these types of targeted locations.

The FHA program provides a loan for a first-time home buyer with less than 3% down payment. This type of loan gives assistance to those buyers without a substantial amount of savings. Another reason this is an attractive option for first-time buyers is because the majority of the closing costs and fees can be included in the loan. Sometimes if you're interested in a home in need of a few repairs, the FHA assistance will factor the repair cost into the loan.

California Homebuyer's Down Payment Assistance Program

CHDAP is a program to assist with the down payment step in the Homebuying process. Since it's a deferred-payment junior loan, it only requires up to 3% of the purchase price or appraised value, if it's less, to be used for the down payment or closing cost. This can be combined with other California programs, and even non-CalHFA first mortgage loans, too.

Though the amount of assistance varies depending on the first time homebuyer's income and qualifications, the buyer receives what they need, and typically up to 20% of the purchase price of the property.

Closing Cost Assistance Program

First time homebuyer (FTHB) Closing Cost Assistance Program helps lower the closing cost to a person with lower income. Again, the buyer receives what they need, with a maximum of $2,000 for non-recurring closing costs.

Mortgage Credit Certificate Tax Credit Program

The Mortgage Credit Certificate Tax Credit Program, MCC, is available to all qualified residents of California. This type of federal credit can reduce potential federal income tax liability because the program creates additional disposable net income that can be used for your monthly mortgage payment.

The MCC Tax Credit program allows you to use a part of the annual mortgage interest for a dollar-to-dollar tax credit on U.S. individual income tax returns.

HUD

The HUD Section 8 Housing Choice Voucher Program helps first time homebuyers by getting monthly assistance for homeowners expenses instead of a standard monthly rent aid. Through HUD, the Public Housing Authorities, or PHA's, gives assistance with money from the Section 8 rental voucher program.

Individual Development Accounts

This gives help to low income borrowers who are looking to buy their first long-term asset , such as a home. This is a unique program because it matches contributions by nonprofit organizations and eligible banks. The. IDA savings accounts can offer up to three times saving match, and there are plenty of directories to help you find an IDA program for you.

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