Los Angeles County Down Payment Assistance and First-Time Homebuyer Programs

There’s nothing better than the bright lights of Los Angeles. The city’s diverse neighborhoods offer something for everyone, whether it’s the trendy vibes of West Hollywood, the beachside charm of Santa Monica, or the historic glamour of Hollywood itself. Los Angeles is a hub for the arts, with world-class museums, theaters, and music venues showcasing a range of talent. Its culinary scene is equally impressive, from food trucks to Michelin-starred restaurants. Beyond the glitz, LA’s thriving industries in technology, entertainment, and healthcare present promising career paths. And let’s not forget the iconic California weather and outdoor adventures, from hiking in the Santa Monica Mountains to surfing in Malibu. Los Angeles is one of the most expensive cities in the country, but if you’d like to buy a home, here are some options with down payment assistance.

Down payment assistance programs in Los Angeles County

Down payment assistance and first time home buyer programs aim to help home buyers make a larger down payment, cover closing costs, or a combination of both. There are several types of home buyer benefits, including grants, forgivable loans, and interest rate reductions and tax credits.

A grant is similar to a scholarship for college. You apply, and if you qualify for the program (i.e. meet all the criteria and the entity still has the money), you can receive funds toward your down payment or for another upfront cost related to your home purchase. 

A down payment loan (or second mortgage loan) is a loan you acquire in order to have the funds for a down payment. Many loan types require a minimum down payment between 3% and 20%. If you don’t have this money saved (many first-time home buyers don’t) then a down payment loan is an option to help you qualify. Some loans are even forgivable if you meet certain requirements like staying in the home for a few years.

Less commonly, some programs come with lower interest rates and tax credits (e.g., mortgage credit certificates) to help lower your monthly payments.

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.

Statewide down payment assistance programs available in Los Angeles County

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.

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.