TABLE OF CONTENTS

    Buying a home is an exciting and somewhat daunting decision. Many people get used to the idea of paying rent, not realizing that there are programs available to help them buy a home and put that rent money into an investment, rather than watch it disappear. 

    If you are a first-time home buyer, you can get help on your down payment as well as closing costs. Here is a guide on the different programs available to see which ones you qualify for.

    VA Loans – Military, Loan Down Payment

    The VA Loan began in 1944 through the original Servicemen’s Readjustment Act, also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. 

    The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA Loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-lenders requires scores of at least 580. 

    CalHFA – Down Payment Assistance

    The California Housing Finance Agency (CalHFA) s a completely self-supporting state agency that provides programs making it possible for low to moderate income Californians to afford a mortgage. Its Single Family Division provides first mortgage loans and down payment assistance to first-time homebuyers. 

    With CalHFA Loans, there are down payment and closing cost assistance available for low- to moderate-income borrowers. Some condos manufactured homes and properties with guest houses or in-law quarters allowed.

    Eligibility Requirements for Cal HFA:

    • The property must be located in California and be the borrower’s first-time home buyers and U.S. citizens, permanent residents or qualified aliens
    • Must have a minimum credit score of 640
    • Must meet all income and sales price requirements
    • Must take an approved home buyer education course and obtain a certificate of completion
    • There may be additional program-specific requirements

    CalHFA Zero Interest Program – Closing Cost Assistance

    This program can make CalPLUS Conventional and CalPLUS FHA loans even more affordable by paying a portion of your closing costs. The CalFHA Zero Interest Program provides up to 4% of the total loan amount in the form of a no-interest second loan. Payments are deferred until the home is sold, refinanced or paid-off. 

    Conventional Mortgage – Low Down Payments, Limited Mortgage Insurance

    A conventional home loan is any mortgage that is not insured or guaranteed by the Federal Government. They are most popular with borrowers that have good credit, can afford a down payment, have a stable job, earn consistent income. Essentially, this loan is perfect for people who are overall financially stable.

    Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for the first-time homebuyer or lower-income buyers. There are options for limited or no mortgage insurance premiums. 

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    FHA Loans – Low Credit Score, Low Down Payment

    The Federal Housing Administration (FHA) was established in 1934 to improve housing standards and conditions and to provide an adequate home financing system through insurance of mortgages.

    This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. 

    School Teacher and Employee Assistance Program 

    Teachers, Public School Employees, Down Payment Assistance, Closing Cost Assistance

    Like the MyHome Assistance Program, the School teacher and Employee Assistance Program is a deferred-payment subordinate loan that helps pay for a down payment or closing costs. The difference, as its name implies, is this program is reserved for teachers, school administrators, school district employees and staff members of California K-12 public schools. Employees of charter schools and county/continuation schools are aos eligible. School Teacher and Employee Assistance Program loans are limited to 4% of the sales price or appraised value, whichever is less. 

    Qualified borrowers are generally allowed to combine the School Teacher and Employee Assistance program with other FHA-approved or Fannie Mae Community Seconds subordinate loans, but not the MyHome program. 

    MyHome Assistance Program – Down Payment & Closing Cost Assistance

    This is a deferred-payment subordinate loan that low- to moderate-income first-time home buyers in California can use to make a down payment or cover closing costs when taking a CalHFA mortgage loan. “Subordinate” means it doesn’t have to be paid off. MyHome Assistance Program loans are limited to 3.5% of the home’s purchase price or appraised value, whichever is lower. Qualified borrowers are generally allowed to combine the MyHome Assistance Program with other down payment assistance or grant programs. 

    Finding the First-Time Home Buyer Program That’s Right For You

    With so many options for the first-time home buyer, getting professional help to review your case is the best next step in your quest to buy a home. If you don’t think you qualify for any of the above, that’s okay, there are many options out there. For example, maybe you are self-employed and need a loan that is not based on your tax returns, we have programs for you as well.

    At Griffin Funding you can expect transparency and open communication, a knowledgeable team of industry experts and a customer-centric team working together to make your home buying experience effortless and exciting. We are fast and efficient, closing most of our purchase loans in 30 days or less.

    Griffin Funding will offer the right loan tailored to you (VA, FHA, Conv, Jumbo, Non-QM and much more). Contact us for more information on your mortgage loan needs.

    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.