Down Payment Assistance Programs

Down payment is often the biggest hurdle for first-time buyers. Fortunately, various programs can help bridge the gap.

Types of Assistance

Grants

Money you don't have to repay:

• Often from state or local housing agencies
• May have income limits
• May require buyer education courses
• Usually for primary residence only

Forgivable Loans

"Silent second" mortgages that are forgiven over time:

• No monthly payments
• Forgiven if you stay in the home for a set period (often 5-10 years)
• If you sell or refinance early, repayment may be required

Deferred Payment Loans

Loans that come due later:

• No monthly payments
• Due when you sell, refinance, or pay off the first mortgage
• Interest may or may not accrue

Low-Interest Second Mortgages

Additional loans at below-market rates:

• Helps cover down payment or closing costs
• Monthly payment required but manageable
• Combined with first mortgage

California Programs

CalHFA (California Housing Finance Agency)

CalHFA offers several programs:

MyHome Assistance:

• Up to 3.5% of purchase price
• Deferred payment loan
• For first-time buyers (or haven't owned in 3 years)
• Income limits apply

Zero Interest Program (ZIP):

• Up to 3% of loan amount
• For closing costs
• Zero interest, deferred payment

Forgivable Equity Builder Loan:

• Up to 10% of purchase price (max $150,000)
• Forgiven over time if you remain in the home
• Income and purchase price limits

Local Programs

Many cities and counties offer their own assistance:

• Fresno County homebuyer programs
• Visalia first-time buyer assistance
• Kings County may have programs through CDBG funding

Programs change frequently—check current availability with lenders and housing agencies.

Eligibility Requirements

Most programs require:

Income Limits

• Based on household size and area median income
• Moderate income limits (often 80-120% of AMI)
• Verified through tax returns and pay stubs

First-Time Buyer Status

• Haven't owned a home in the past 3 years
• Some exceptions for veterans or certain areas

Homebuyer Education

• Completion of HUD-approved course
• Usually 6-8 hours, online or in-person
• Good preparation regardless of assistance

Primary Residence

• Must live in the home as your primary residence
• Investment properties don't qualify

Purchase Price Limits

• Maximum purchase prices set by program
• Varies by county and program

How to Access Programs

Step 1: Talk to Your Lender

Many programs work through approved lenders:

• Lender must be certified with the program
• They know current availability
• They handle the paperwork

Step 2: Research Options

Check:

• CalHFA website
• Local housing authority
• HUD-approved housing counselors
• Employer assistance programs

Step 3: Get Pre-Approved

Pre-approval with DPA considered:

• Confirms you qualify
• Shows sellers you're serious
• Clarifies your actual buying power

Combining Programs

Sometimes you can stack assistance:

• State program + local program
• Down payment assistance + MCC (Mortgage Credit Certificate)
• Multiple sources to maximize help

Not all programs combine—check compatibility.

Tradeoffs to Consider

Assistance isn't free money without strings:

• May limit your lender choices
• May require higher interest rates
• Forgivable loans create obligations to stay
• May take longer to close
• Some sellers prefer non-assisted buyers

Weigh the benefits against limitations for your situation.

The Bottom Line

Down payment assistance makes homeownership possible for many who couldn't otherwise qualify. But do the math—sometimes saving longer or buying less expensive might work better than assistance with strings attached.

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Want to explore assistance programs? Contact Greg Franklin or call (559) 816-7780 for lender referrals who work with DPA.