California Down Payment Assistance and First-Time Homebuyer Programs

California is more than just a state; it’s a lifestyle. From its golden coastline to natural wonders, coveted climate, and cinematic landscape, the Golden State has become an attractive destination for visitors and residents. Yet, what may elude many is the steep price tag attached to homeownership.

California has grappled with a long-standing housing crisis for decades, and its severity appears to be escalating in recent years. While some attribute this crisis to population growth, others cite factors like low housing supply, high demand, rising construction costs, and the lingering impact of the COVID-19 pandemic as causes.

What does this mean to the average resident? Well, among other implications, the housing crisis has led to high housing costs, making it increasingly difficult to afford rent and, more importantly, mortgage payments. According to Zillow, the median home value in California is $750,709, more than double the U.S. median home value of $344,141.

Thankfully, residents can significantly reduce mortgage amounts through various down payment assistance, particularly for first-time homebuyers. Some programs offer as much as 234 in down payment assistance. As long as you have the correct information, you can explore these loans and own a home in the Golden State despite its severe housing crisis.

Looking for assistance in a specific part of California?

This page explores all the assistance options available to California homebuyers, including statewide and local resources. If you’re looking for information about down payment assistance in your area only, you can also find local information here:

• San Diego County
• San Francisco
• Brentwood
• Emeryville
• Los Angeles County
• Monterey County
• Orange County
• Santa Ana

Down payment assistance programs in California

The persistent housing crisis in California has given rise to numerous down payment programs. At Stairs Financial, we offer relevant information regarding these programs, simplifying the process of identifying and comparing various assistance options that align with your needs.

CALHFA Homeownership Program

The California Housing Finance Agency (CALHFA) provides assistance programs for low- and moderate-income first-time homebuyers to help with down payments and closing costs. The program offers several options, like the MyHome Assistance Program, which offers deferred FHA loans of up to 3.5% of the purchase price. CALHFA assistance can also be used alongside the Dream For All Conventional first mortgage.

Assistance type: Deferred payment loan

Sponsor: CALHFA

Assistance amount: 3.5% of the purchase price for FHA loans and 3% for conventional loans

Minimum borrower contribution: None

Eligibility requirements

• Applicants must meet the credit requirements, CALHFA income limits, and loan requirements set by an approved lender and mortgage insurer.
• The property you purchase must be your primary residence.
• Applicants must complete Homebuyer Education Counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.

GSFA DownPayment Assistance Program

The Golden State Finance Authority Downpayment Assistance programs are assistance loans that help homebuyers with the down payment and closing costs on the purchase or refinance of a primary residence in California. GSFA offers platinum and golden assistance opportunities to help you purchase a home sooner than you thought possible. This loan option can be combined with the Mortgage Credit Certificate tax credit.

Assistance type: Deferred forgivable loan, Second mortgage

Sponsor: Golden State Finance Authority

Assistance amount: Financial assistance up to 5.5% of the First Mortgage Loan amount

Minimum borrower contribution: None

Eligibility requirements

• Financial assistance up to 5.5% of the First Mortgage Loan Amount
• FICO scores as low as 640 can qualify, and DTIs up to 50% are allowed in some circumstances.
• Various First Mortgage Loan types are available to fit the homebuyer’s needs, including FHA, VA, USDA, and conventional financing.

San Diego County Down Payment and Closing Cost Assistance

San Diego County Downpayment and Closing Cost Assistance offers a low-interest deferred payment loan for low-income, first-time homebuyers. This loan option is deferred until you refinance, sell, pay off the first mortgage, or no longer occupy the property as your primary residence.

Assistance type: Deferred payment loan

Sponsor: San Diego County and San Diego Housing Commission

Assistance amount: 22% of the purchase price for downpayment assistance; 4% and up to $10,000 in closing costs assistance.

Purchase price limit: $676,000

Minimum borrower contribution: 3% of purchase price

Eligibility requirements

• The home you buy must be your primary residence.
• Qualified buyer’s daily income must not exceed 80 percent of the San Diego County AMI.
• You must first complete an educational class provided by one of these organizations: CalHome/ HUD-approved Homebuyer Education Providers.

San Francisco Downpayment Assistance Loan Program

Amid the housing crisis, San Francisco has developed to have one of the most expensive real estate markets in California and the entire country. Thankfully, the San Francisco Downpayment Assistance Loan Program aims to assist moderate to low-income individuals in purchasing their first home within the city.

Assistance type: Deferred payment loan

Sponsor: City of San Francisco

Assistance amount: $500,000

Purchase price limit: None

Minimum borrower contribution: 1% of the purchase price 

Eligibility requirements

• Specific to first-time home buyers.
• The applicant’s household income must not exceed 200% of the AMI.
• Applicants must attend homebuyer education and get a mortgage loan pre-approval letter from an approved lender.

Brentwood Down Payment Assistance Program

The City of Brentwood offers first-time homebuyers the Down Payment Assistance Program (DAP), which provides homebuyers with the funds to settle downpayment or closing costs. Typically, funds are limited, so the program operates on a first-come, first-serve basis.

Assistance type: Deferred payment loan

Sponsor: City of Brentwood

Assistance amount: $10,000

Purchase price limit: None

Minimum borrower contribution: 3% of the downpayment

Eligibility requirements

• Applicants must be first-time homebuyers who have not owned a home in California within the last three years.
• Applicants must have an annual household income at or under 120 percent of the AMI.
• The program also mandates that all applicants complete a first-time homebuyer education course and procure a first mortgage through one of the city’s preferred lenders.

Emeryville First Time Homebuyer Loan Program

Emeryville’s First Time Homebuyer Loan Program aims to keep residents out of the rental trap by providing an opportunity to conveniently pay the high upfront costs of buying a home. This program provides downpayment assistance to households at or below the City’s moderate income.

Assistance type: Low-interest rate, deferred payment loan

Sponsor: City of Emeryville

Assistance amount: 75% of the first mortgage’s rate, or 5% – whichever is less.

Purchase price limit: None

Minimum borrower contribution: 3% of the downpayment

Eligibility requirements

• Applicants must be first-time homebuyers who have not owned a home in California within the last three years. However, there are some exceptions to this requirement.
• Applicants’ total household income must fall within 120% of the area median unless one of the buyers in the household is an employee of the City of Emeryville.
• Any home being purchased must serve as the applicant’s primary residence.

Los Angeles County Affordable Homeownership Program

The Los Angeles County Affordable Homeownership Program is an initiative by the Los Angeles County Development Authority (LACDA), providing low and moderate-income households with downpayment assistance. This program comes as a secondary mortgage, with all payments deferred until the home is sold, transferred, or refinanced.

Assistance type: Secondary Mortgage

Sponsor: Los Angeles County Development Authority

Assistance amount: $161,000

Purchase price limit: None

Eligibility requirements

• Applicant’s income must fall within the specified limits, 80% for low and 120% for moderate AMI.
• Applicant should not have owned a principal residence within the past three years.
• Applicants must also complete homeownership counseling and education from accredited and certified agencies.

Monterey County Down Payment Assistance Program

The Monterey County Downpayment Assistance Program helps individuals overcome the challenge of hefty mortgage payments by offering first-time homebuyers assistance with downpayment. This program is funded by HOME funds and can only be used to purchase a home in the unincorporated areas of Monterey County.

Assistance type: Forgivable loan

Sponsor: Monterey County

Assistance amount: Maximum HOME subsidy limit, 20% of the purchase price, or amount needed as determined by underwriting criteria.

Purchase price limit: $396,000

Minimum borrower contribution: 3.5% of the purchase price

Eligibility requirements

• Applicants must be residents of Monterey County and first-time homebuyers.
• This program is available only to those whose annual household income falls at or under 80 percent of the AMI for Monterey County.
• Applicant must purchase a modest residence, at most three bedrooms, two bathrooms, and a two-car garage.

Orange County Housing and Development Mortgage Assistance Program

The Orange County Housing and Development Mortgage Assistance Program offers silent, deferred payment, downpayment assistance loans to assist low-income first-time homebuyers. Applicants receive assistance in the form of a second mortgage with a 30-year deferred payment term.

Assistance type: Deferred payment loan

Sponsor: Orange County Housing and Development

Assistance amount: $80,000

Purchase price limit: 85% of median sales price for homes in the County

Minimum borrower contribution: 1% minimum down payment

Eligibility requirements

• First-time home buyer
• Applicant’s annual income must not exceed 80% of the AMI in Orange County
• The total sales prices cannot exceed 85% of Orange County’s median home sales price.

Santa Ana Downpayment Assistance Program

The Santa Ana Downpayment Assistance Program offers zero-interest loans to help first-time homebuyers achieve their dream of homeownership within the City of Santa Ana.

Assistance type: Zero-interest loan

Sponsor: City of Santa Ana

Assistance amount: $40,000

Purchase price limit: $499,000

Minimum borrower contribution: 3% of the down payment.

Eligibility requirements

• First-time home buyers
• Applicants must be pre-qualified for a first mortgage and have an acceptable credit score.
• The applicant’s household income must fall at or below 80 percent of Santa Ana’s AMI.
• Applicants must also complete the Homebuyer Counseling Program.

California down payment assistance program FAQ

Here are some of the most frequently asked questions from first-time California homebuyers looking for downpayment assistance.

Does California have a first-time buyer program?

Yes, California has several first-time homebuyer programs. Residents can explore federal options like the CALHFA Homeownership Program; however, different cities in the state also provide unique programs for first-time home buyers. Each of these programs offers downpayment assistance, usually in the form of deferred payment loans.

How to buy a house for the first time in California?

When considering buying a house in California, the first step is to calculate your annual income and obtain a copy of your credit score. These are some of the significant requirements for any downpayment assistance program.

Next, identify other requirements unique to the city where you plan to buy a house. For instance, some cities mandate a first-time home buyer education class, which provides applicants with all the information they need to start. Stairs Financial also streamlines the process of identifying the programs you qualify for and contacting trusted lenders.

What is the minimum down payment in California?

The minimum downpayment for conventional loans in California is typically set at 3% of the purchase price. In comparison, homebuyers who use an FHA loan usually must put down at least 3.5% of the purchase price. However, some loans have zero interest and zero down payment.

Can you get Biden first-time home buyer assistance in California?

The Biden first-time homebuyer assistance program is still a bill with the 2023-2024 Congress and has not become law. However, national programs like the $25,000 Downpayment Toward Equity Act will also be available in California when it goes into effect.

What type of California first-time homebuyer assistance is available?

Most California first-time homebuyer assistance options are in the form of loans or grants; however, the loans take on various types, including forgivable and deferred payment loans. Forgivable loans require you to make mortgage payments consistently and remain in the home for a specified number of years. On the other hand, deferment conditions could be when the house is sold, refinanced, or the mortgage is paid off.

What is the California first-time homebuyer income limit?

The California first-time homebuyer income limit for downpayment assistance is usually 80% of each city’s area median income (AMI). Some programs could also reach 120% of the AMI and vary depending on the city and the number of people in the household.

What are some requirements for first-time home buyers in California?

Some standard requirements for first-time homebuyers in California include;

• Applicants should not have owned a home within a certain period, mainly about three years.
• The property purchased must serve as the applicant’s primary residence
• Applicants must have a minimum credit score between 620 and 640.

How do I qualify for California first-time home buyer programs?

The most significant qualifying requirement for California first-time homebuyer programs is income limits; as such, it is good practice to calculate your income. Most programs also consider various forms of income, including cash reserves and income from sources other than your primary employment.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.