Orange County Down Payment Assistance and First-Time Homebuyer Programs

Orange County has beautiful coastal landscapes, affluent communities, and abundant recreational and cultural opportunities–what’s not to like? The county boasts a Mediterranean climate with mild, sunny weather year-round, making it an ideal destination for outdoor enthusiasts. Furthermore, they have iconic attractions such as Disneyland and Knott’s Berry Farm, as well as stunning beaches like Laguna Beach and Newport Beach. Its strong economy, diverse job market, top-rated schools, and upscale neighborhoods also make it a popular choice for families and professionals seeking a high standard of living and career opportunities in industries such as technology, healthcare, and finance. Those are some of the reasons it’s one of the most expensive places to live in the country, but there are still mortgage options with down payment assistance to choose from.

Down payment assistance programs in Orange 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.

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.

Statewide down payment assistance programs available in Orange 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.