There’s no surprise that buyers seek down payment assistance. The immediate reaction is to seek it from friends and family, but there are other programs available that could help buyers obtain down payment funds. The reason why this is so important is because an escrow typically needs the buyer’s down payment plus closing costs in order to complete the sale. Here are some avenues:
Alameda County Mortgage Credit Certificate (MCC) Program: This program provides a federal income tax credit of up to 15% of the annual mortgage interest paid on a home loan. The credit can be used to reduce the borrower’s federal income tax liability, which can make homeownership more affordable. To qualify, borrowers must meet income and purchase price limits and complete a homebuyer education course.
California Housing Finance Agency (CalHFA) MyHome Assistance Program: This program provides a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value (whichever is less) to help with down payment and/or closing costs. The loan does not accrue interest and must be repaid when the home is sold, refinanced, or no longer used as the borrower’s primary residence. To qualify, borrowers must meet income and purchase price limits and complete a homebuyer education course.
City of Oakland First-Time Homebuyer Program: This program provides up to $75,000 in down payment and/or closing cost assistance in the form of a deferred-payment loan with no interest or monthly payments. The loan must be repaid when the home is sold, refinanced, or no longer used as the borrower’s primary residence. To qualify, borrowers must meet income and purchase price limits and complete a homebuyer education course.
City of Fremont First-Time Homebuyer Program: This program provides up to $75,000 in down payment and/or closing cost assistance in the form of a deferred-payment loan with no interest or monthly payments. The loan must be repaid when the home is sold, refinanced, or no longer used as the borrower’s primary residence. To qualify, borrowers must meet income and purchase price limits and complete a homebuyer education course.