A Guide to First-Time Home Buyer Programs, Loans, And Grants

A Guide to First-Time Home Buyer Programs, Loans, And Grants

The dream of home ownership is challenging for most people. Therefore, it's an impressive achievement when your hard work pays off, and you decide to purchase a home for the first time. Buying a home in the illustrious Los Angeles area makes it even more outstanding.

To celebrate your success, Craig & David Homes wants to ensure you get the help you need and deserve when buying your first home. This guide to first-time home buyer programs, loans, and grants is designed to help you understand what's available for anyone looking to buy a home in Los Angeles.

First steps to home ownership

Los Angeles is a highly competitive area to search for homes because of the many wondrous benefits of living here, depending on the neighborhood you choose. However, there are fewer properties available for people seeking to move in.

Whether you love glistening beaches or cityscape views of the area from a nearby hillside, Los Angeles has everything you could want.

Before diving into homeownership, you should look into finding a qualified real estate partner to work with. A real estate agent will be your best asset in the hunt.

First-time home buyer programs in L.A.

California offers several first mortgage programs to help you on your journey to home ownership. Most are through the California Housing Finance Agency (CalHFA).

CalHFA requires you to work with an approved lender or loan officer to ensure you can get a mortgage. You must also meet specific CalHFA eligibility requirements, including the following:
  • Being a first-time home buyer.
  • Meeting CalHFA income limits and loan requirements of the mortgage issuer.
  • Planning to use the residence as your primary home.
  • Completing homebuyer education counseling and obtaining a certificate of completion.

Homebuyer Education Counseling will cost a one-time fee of $99 if completed online. In-person counseling fees will vary based on the agency.

Once you have established whether you meet the requirements for mortgage assistance and completed the required counseling, you must decide which programs you are eligible for. These can be broken down into two sections, depending on whether you want a conventional or government loan.

Conventional loan options

The CalHFA USDA Program requires you to:
  • Be a primary resident.
  • Complete the counseling.
  • Meet income limits.
The property must also qualify. This means it must be:
  • A single-family residence, condominium, or manufactured home.
  • In a USDA-eligible rural area.
The interest rate on the CalHFA Conventional is fixed throughout a 30-year term.
Your interest rates will vary based on your financial situation, lender fees, etc. Therefore, it is crucial to consult with your lender to find accurate interest rate fees that may be included with your loan.

The CalPLUS Conventional Program is also available. It has the exact basic requirements, but it's a conventional first mortgage with a slightly higher 30-year fixed interest rate. It also gives you the added benefit of the CalHFA zero-interest program for closing costs.

Government loans

The CalHFA VA Program has the requirements of a conventional loan, but you must also include a valid certificate of eligibility per applicable VA guidelines for the applicant. Furthermore, it has a fixed 30-year mortgage rate.
CalHFA USDA Program
The USDA guarantees the CalHFA USDA program and can combine the MyHome Assistance Program. This means it can assist you with down payments and closing costs. It is an excellent option for first-time buyers, though it has an income limit and rural area restrictions that may make it unsuitable for some clients. This means the property must be within a USDA-eligible rural area.
CalHFA MyHome Assistance Program
If you meet the requirements, the MyHome Assistance Program offers a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value. This is designed to assist you with down payments and/or closing costs if you qualify for a government loan. With a conventional loan, it will cover up to 5%. You must meet the financial requirements as determined by Los Angeles County. To be eligible, you must earn less than $194,000.

Other first-time home buyer assistance programs

There's help available to anyone who may be trying to purchase their first home, even low-income or moderate-income families. These two options allow a family of four to make less than $100,900 per year based on all residents aged 18+.

In addition to being a U.S. citizen, a first-time home buyer, and having the appropriate income, you must also:
  • Have a FICO score of at least 660.
  • Attend a homebuyer education class.
  • Use it as your primary residence.
  • Be able to contribute at least 1% of the home price as a down payment.
You may also qualify for the Mortgage Credit Certificate Program (MCC). This federal income tax credit is based on 20% of the annual interest you pay on a mortgage. This allows you to
  • Potentially see a reduced income tax liability.
  • Increase your disposable income amount.
  • Qualify for a higher mortgage.
  • Receive tax credits annually for the lifetime of your first home mortgage.
If you meet the requirements for the MCC, you may also be able to refinance and take advantage of a Reissued MCC.

Know what to expect before buying your dream home

Knowing what housing assistance may be available as a first-time home buyer can be tough. There are many eligibility requirements and things to sort through if you're seeking help in the high-dollar home market around Los Angeles.

You can get advice from your chosen lending agent or help from a Realtor who knows how to help you understand the requirements and find a home that allows you to qualify.

Before missing out on something that may help you have your dream home and have it be more affordable, contact Craig & David Homes. They will be happy to help you determine the best options for your circumstances as a first-time home buyer and keep your costs as low as possible.

Work With Us

Our shared experiences helped us figure out that we were as good at doing business together as we were friends, so it was logical to team up and work together in Los Angeles real estate sales and development. Contact us today to start your home searching journey!

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