What is the Forgivable Equity Builder Loan?

Imagine getting up to 10% of the purchase price of a home paid for up front so that you have immediate equity … that’s what the Forgivable Equity Builder Loan does for you.

The zero percent interest rate loan is available through CalHFA (California Housing Finance Agency). It’s for first-time homebuyers, and there are conditions that must be met to qualify.

And, like the name states, it’s forgivable. You don’t have to pay it back as long as you occupy the home as your primary residence for a minimum of 5 years. You may have to pay back a portion if you live in the home less than those 5 years.

Eligibility Requirements for the Forgivable Equity Builder Loan

Here are the guidelines given by CalHFA to determine if you may qualify for this loan:

Borrower (You):

  • First-time homebuyer
  • Occupy the property as your primary residence
  • Complete Homebuyer Education and Counseling course (online, in-person, and virtual options are available)
  • Meet county income limits set by Fannie Mae


  • Single-family, single-unit residence
  • Manufactured housing is permitted
  • Condominiums may be approved if they meet guidelines

You should contact a qualified mortgage loan officer to see if you do, in fact, qualify for this loan program.

Why You Want to Build Equity in your Home

CalHFA says, “Home equity has proven to be one of the strongest ways for families to build and pass on intergenerational wealth.” This is why they developed this loan program.

NerdWallet agrees that “home equity can be a long-term strategy for building wealth.” They compare home ownership to a “forced savings account” since your mortgage payments reduce what you owe while at the same time your home gains in value.

The Forgivable Equity Builder Loan speeds up the process of building that valuable equity in your home. If you qualify, it’s definitely something to consider.

Are You a First-Time Homebuyer?

While the Forgivable Equity Builder Loan is processed by a mortgage loan officer, having a real estate professional on your side that you can trust makes all the difference. Especially when you’re a first-time homebuyer.

The Foxen Team has helped a lot of first-time homebuyers just like you through the process, and you can count on us to help you, too. Send us a message or call us at 559-490-0207 today to start the conversation.

And in the meantime, you may also find our FAQs for First-Time Homebuyers helpful in answering other questions you may have.

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