Incentives for First Time Home Buyers in 2017
Saving up for a down payment on a house can be difficult and take a lot of time. Fortunately, in California, there are a couple of incentives to make buying a home for the first time more doable, such as first mortgage programs, down payment assistance programs, and other program offers. Here’s a closer look at the incentives for first time home buyers in 2017.
First Mortgage Programs
CalPlus Conventional Loan Program
The CalPlus Conventional Loan is for first time mortgage users and is insured through private mortgage insurance on the conventional market. The loan is payed off with equal monthly payments over 30 years. This is a good option to use if you also need assistance for a down payment because it is also combined with the CalHFA Zero Interest Program (ZIP), a deferred payment junior loan of 3% or 4% of the first mortgage loan amount, for down payment assistance.
CalHFA Conventional Loan Program
The CalHFA Conventional Loan is a first mortgage loan insured through a private mortgage insurance on the conventional market. It is a fixed 30-year term interest rate. This loan can be combined with the Extra Credit Teacher Program (ECTP) for down payment assistance.
Government Insured Loans
CalPLUS FHA Loan Programs
The CalPLUS FHA loan is a first mortgage loan insured through the Federal Housing Administration (FHA). It is a fixed interest rate over a 30-year term. This loan can be combined with the CalHFA Zero Interest Program (ZIP), a deferred payment junior loan of 3% or 4% of the first mortgage loan amount.
CalHFA FHA Loan Program
The CalHFA FHA loan program is insured through the Federal Housing Administration (FHA) and the interest rate is fixed throughout a 30-year term. This loan can be combined with the Extra Credit Teacher Program (ECTP) for down payment assistance.
Cal-EEM + Grant Program
The Cal-EEM + Grant Program is a combination of an FHA-insured Energy Efficient Mortgage (EEM) first mortgage loan and the Cal-EEM Grant to make energy efficient improvements easier. The interest rate for this loan is a fixed rate on a 30-year term. It can be combined with the Extra Credit Teacher Program (ECTP) for down payment assistance.
Down Payment Assistance Programs
The CalHFA down payment and closing costs loans are called “silent seconds” which means that the payments on these loans are deferred so you don’t have to make a payment on the assistance until your home is sold, refinanced, or paid off in full. This is to help keep the monthly mortgage cost down and affordable.
MyHome Assistance Program
This assistance program offers a deferred payment junior loan up to 3.5% of the purchase price, or appraised value, whichever is less. It is then used to help with the down payment or the closing costs. If this program is used then it must be combined with the CalHFA first mortgage loan.
Extra Credit Teacher Home Purchase Program (ECTP)
The ECTP is a deferred payment junior loan available to teachers, administrators, classified employees and staff members who are working in county/continuation or high priority schools in California. This loan ranges from $7,500 to $15,000 depending on the area that the home is being purchased. It can only be combined with the CalHFA first mortgage loan.
Other Program Options for First Time Home Buyers
Mortgage Credit Certificate Tax Credit Program (MCC)
The Mortgage Credit Certificate is a tax credit program which is filed yearly with the rest of your taxes. In California the MCC generally takes 20% of the interest you paid in the previous year and gives it back to you in tax credit form. This money can be used to help pay off your monthly mortgage.
Home Buyer Assistance Program – Fresno
The Home Buyer Assistance Program for the city of Fresno is funded by the U.S. Department of Housing and Urban Development. The program offers 0% interest loans and has helped hundreds of families purchase their first homes. You can get a loan up to 20% of the cost of the home. This loan must be paid back within 30 years or when the home is sold. There are certain income requirements in order to qualify.