Understanding California's Downpayment Assistant Programs

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Understanding California's Downpayment Assistant Programs

We've all grown up with this goal to find a steady job and get to the point where we feel like we're really stable in life so we can finally take the ultimate step: buying a home for ourselves and/or our family.

But buying a house is a huge investment.

It's not every day that you'll consider dropping over $400K on a single purchase. But when it comes to buying a home in California, that's exactly what you may have to do.

The first few steps to buying your new home are shopping around, choosing your ideal neighborhoods, sticking to a budget, and saving up for your down payment. Most mortgage lenders require a down payment of at least three to three-and-a-half percent, however, a more common down payment goal is 20 percent (this way you avoid additional fees and the need to buy mortgage insurance). A 3.5 percent down payment for a $500,000 home (the average home price in California) is $17,500, and a typical 20 percent down payment for a $500,000 home is $100,000. And most people simply don't have that kind of money saved up for a down payment.

This is where California's down payment assistance programs comes in, to help average people and families (like you and yours) have the ability to buy their dream (or starter) home without unreasonable savings goals.

What is a down payment assistance program?

Most times the people in need of down payment assistance are first-time buyers who don't have enough savings for a full 3.5 percent down payment or money to cover closing costs. When second- or third-time buyers are searching for a new house, they can often get the extra funding from the sale of their previous home.

These programs are designed to help first-time homebuyers secure a loan for up to 3.5 percent of the entire sale of their home so they can meet down payment requirements for the mortgage and cover closing costs. Many of these loans are deferred payment, so you won't even have to worry about beginning to pay off your down payment at the same time you're starting to pay your mortgage. However, some are grant programs, which don't require repayment at all.

Why do I need down payment assistance?

You might not. If you have regularly been able to set aside a portion of your paycheck each month to eventually put towards a home, that is excellent. Unfortunately, not everyone who wants to buy a home has had the luxury to do so, and that is why assistance programs like this exist.

California's cost of living is one of the highest in the whole country, and not every wage has been fixed to match. But that doesn't mean those people are any less deserving of owning their dream family home.

This is why the ability to get assistance on the down payment of a home exists. It's designed for people and families who have always dreamed of owning their own home but do not have the luxury to set aside money to save up for it themselves. It gives every person and family in California the potential to buy their own house.

How do these down payment assistance programs work?

California offers a few different down payment assistance programs. Two of the most common are the MyHome Assistance Program and the Extra Credit Teacher Home Purchase Program (ECTP).

The ECTP is catered towards all staff and employees of public K-12 schools in California to ensure that our educators are given access to adequate living arrangements.

The MyHome Assistance Program is for all other Californians that are eligible for help with their home's down payment. It's important to note that the home must be your primary residence. (Down payment assistance programs will not assist with investment properties.)

How We Can Help

To see if you meet the requirements, fill out our form to find out what down payment assistance or other programs you are eligible. Upon submitting the eligibility request, we will alert you to which programs you qualify, and are here to help you make the best decision for you and your family. 

Don't let your lack of savings stop you from buying the home of your dreams. With California's down payment assistance programs and Ubermortgage, you too can become a homeowner.


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