But don’t give up hope! There are several programs available for first-time homebuyers that may make your dream of owning a home in Laguna or Orange County more easily attainable than you think.
What’s a California First-Time Homebuyer?
In California, a first-time homebuyer is anyone who has not owned a home for the past three years or more. So, whether you owned a property before and lost it in the recession 10 years ago, or you just decided to rent for the last three years, you can still qualify for these great California first-time homebuyer programs.
CalHFA. The CalHFA program benefits low- and moderate-income first-time homebuyers. You can use this program to buy a single-family home, as well as some condos and manufactured homes. Properties with in-law units and guest-houses are permissible.
o The property must be in California
o It must be your primary residence for the duration of the loan (but you can refinance later if you want to move and rent it out as an investment property)
o Minimum credit score of 640 (with some exceptions)
o The lot must be 5 acres or less.
o You must meet income requirements ($174,200 here in Laguna Beach and Orange County, California, as of 2019. Click here for limits in other counties.)
o You must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.
MyHome Assistance Program. This is a down-payment assistance program that allows qualified homebuyers to borrow up to 3.5% of the purchase price or appraised value (whichever is less). This may be a terrific option if you don’t have a down payment. Must be combined with a CalHFA first mortgage loan.
School Teacher and Employee Assistance Program. If you’re a California public school employee (K-12) and a first-time homebuyer, you may qualify for this special down-payment assistance program. STEAP allows qualified buyers to finance a down payment and/or closing costs up to 4% of the purchase price. However, they can only be combined with an eligible CalHFA first mortgage loan.
FHA Loans. This is a federal program, not a state program. Under FHA, down payments can be as low as 3.5% of the purchase price – and you can use money gifted from family and friends to help with the down payment, with some restrictions. If you’ve had credit problems or a low credit score, FHA may be a good way to go. FHA backs mortgages for people with credit scores as low as 520, though most banks add their own requirements. Contact us for details.
USDA Loans. A zero-down program. This may be a great idea if you want to buy a home in a rural community or in certain suburban areas. Subject to income limitations, this program works best for credit scores above 640 (though lower scores may qualify in some circumstances).
Not sure which program is best for you? No worries! Call us today in our Laguna Beach offices at (949) 494-4861 or toll free (866) 389-2778 and we’ll work out a game plan based on your individual situation.
Better yet, fill out our online application and we can work on getting you pre-approved for the best home loan for your situation.