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The state of California recently rolled out a pair of programs designed to help residents buy new homes or stay in their current ones, one of which provides forgivable loans to buyers for up to 10% of the purchase price.
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The programs, announced last month, include the Forgivable Equity Builder Loan program administered by the California Housing Finance Agency (CalHFA), and the CalHome Awards program administered by the state’s Department of Housing and Community Development (HCD).
Under the Forgivable Equity Builder Loan program, homebuyers can get a loan of up to 10% of the purchase price. If the buyer stays in the home for five years, they don’t have to repay the junior loan, which should ease the way to homeownership for many Californians.
The loan is available to Golden State residents whose income is less than 80% of the area median income in the county where the property is located. For example, in Sacramento, a family can earn up to $72,700 a year and qualify for the loan. In San Diego County, the limit is $76,080, while in Santa Clara County the limit is $118,960. The loan can be used for down payments or closing costs, including rate buydowns.
“Home equity has proven to be one of the strongest ways for families to build and pass on intergenerational wealth and CalHFA is committed to improving equitable access to homeownership for all Californians,” CalHFA Executive Director Tiena Johnson Hall said in a press release. “The Forgivable Equity Builder Loan, which gives first-time homebuyers a head start with immediate equity in their homes, will help California families build and pass on that wealth with a secure, stable home loan.”
The loan is available through CalHFA’s network of approved lenders, which operates in every California county. Residents who think they might qualify should contact a Preferred Loan Officer.
The CalHome Awards program will provide more than $67 million in grant funding for 33 CalHome projects across California to support low- and very low-income households so they can become or remain homeowners.
The funds will assist individual first-time homebuyers in a variety of areas, including deferred-payment loans and home rehabilitation.
“Much like our Statewide Housing Plan, the focus of CalHome is not just about creating new housing, but also preserving the existing affordable housing we currently have so that Californians at all income levels can maintain a roof over their heads,” said HCD Director Gustavo Velasquez
For more information, visit the CalHome page on the HCD site.
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These new programs are in addition to existing programs designed to help Californians buy or remain in homes. One is the California Mortgage Relief Program, which helps homeowners get caught up on their housing payments. The program is free, and the relief funds do not need to be repaid.
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