A Guide To First-Time Home Buyer Programs, Loans, and Grants In Sacramento

A Guide To First-Time Home Buyer Programs, Loans, and Grants In Sacramento

Achieving the dream of homeownership can be daunting for many home buyers in Sacramento, California. With rising housing costs and economic changes, navigating the buying process can feel overwhelming. However, several affordable housing options and assistance programs are available to help buyers make their dreams a reality.

This guide aims to provide an objective and informative overview of various home buyer programs, loans, and grants. From federal to state and local programs, charitable or nonprofit organizations to employer-sponsored initiatives, this guide will explore the different types of resources aspiring homeowners can utilize to achieve their goals. Read on!

Types of first-time home buyer programs

If you are a first-time buyer, you can explore various options that can assist you with your down payment and closing costs. These options include California's various state and local programs, as well as federal programs.

State and local home buyer programs

These programs offer a range of options, including down payment assistance, low-interest loans, and special interest rates, making it easier for those with less-than-perfect credit to qualify for a mortgage. It is important to note that eligibility requirements vary depending on the program.

The California Housing Finance Agency (CalHFA) offers several homebuyer assistance programs. To be eligible, you must complete a counseling course and meet specific income and credit score limits.

First-time mortgage programs through the CalHFA include government loans, like the CalHFA FHFA Program, CalPLUS FHA Loan Program, a VA loan program, and a USDA program. CalHFA also offers conventional loan programs. In addition, the MyHome Assistance Program provides a deferred payment junior loan to help with down payments and closing costs.

CalVet Home Loans is a state agency specifically designed to help veterans purchase a home in California. The agency provides loan guidance, financing solutions, insurance, and more.

Federal first-time home buyer programs

Numerous federal housing programs aim to assist individuals in achieving their homeownership goals, providing various resources and options for first-time buyers.

The Federal Housing Administration (FHA) offers loans with low down payments and flexible credit requirements, making it easier for those with less-than-perfect credit or higher debt-to-income ratios to qualify for a mortgage.

The Department of Veterans Affairs (VA) offers VA loans to active-duty military personnel, veterans, and eligible spouses with no down payment requirement and competitive interest rates.

The United States Department of Agriculture (USDA) provides rural development loans that can help finance the purchase of a home in eligible rural areas, including up to 100% financing and low-interest rates.

Charitable or nonprofit home buyer programs

Charitable or nonprofit organizations in California offer additional resources for home buyers hoping to purchase a first home. They provide education, counseling, and financial assistance to help make homeownership more accessible.

These organizations include NeighborWorks Sacramento, which offers pre-purchase counseling and workshops on credit repair, budgeting, and homeownership-related topics. NeighborWorks Sacramento also offers down payment assistance programs.

Employer-sponsored home buyer programs

Employer-sponsored first-time home buyer programs offer a unique opportunity for employees to receive financial assistance towards purchasing their first home through their employer. While not offered broadly, these employer-assisted housing programs (EAHPs) are becoming increasingly popular as employers recognize the benefits of providing this perk to attract and retain valuable talent.

The most common type of program is an employer-matching contribution, where the employer matches a percentage of the employee's down payment or closing costs. Some employers offer interest-free loans or grants, while others partner with local housing agencies to provide additional resources and education.

These programs can be an excellent way for employees to achieve their dream of homeownership while reducing financial stress and increasing job satisfaction. However, it's essential for potential buyers to thoroughly research their employer's program and understand any restrictions or eligibility requirements before making any decisions.

Other home buyer loans and grants 

The CalHFA School Teacher and Employee Assistance Program offers down payment assistance for school teachers, school district employees, administrators, and staff members at California K-12 public schools. Students working in the K-12 system while going to college also qualify.

Additionally, the Fannie Mae Student Loan Cash-Out Refinance program allows borrowers with student loan debt to refinance their mortgages and use the cash-out proceeds to pay off their student loans.

Frequently Asked Questions

Are there any special programs for home buyers who are self-employed or have irregular income?

There are no specific home buyer programs in California for those who are self-employed or have irregular income. However, they may still qualify for other assistance programs if they meet the eligibility requirements. It is recommended to consult with approved lenders to explore your options.

Can I use grants or loans to renovate or repair an existing home instead of purchasing a new one?

Buyers may be eligible for renovation or repair grants and loans, but availability varies by state and program. These options can assist with upgrading an existing home rather than purchasing a new one.

How long does it typically take to complete the Homebuyer Education and Counseling course required for some assistance programs?

The time it takes to complete the required Homebuyer Education and Counseling course for some home buyer assistance programs in California may vary. It typically takes several hours or a full day.

Are there any restrictions on the type of property that can be purchased with grants or loans, such as age or location?

Restrictions on the type of property that can be purchased with home buyer grants or loans vary by program and location. Typically, properties must be owner-occupied primary residences and meet specific eligibility requirements.

A wealth of opportunity awaits

First-time home buyers in Sacramento have various types of programs and assistance available to help them achieve all their goals. These programs offer loans, grants, and other forms of financial aid that can significantly reduce the upfront costs of buying a home.

If you are a first-time home buyer and need help determining which of these programs is best for you, contact the Vierra Group. This exceptional team is ready to help you purchase your first home in Sacramento. Reach out today for a consultation and more information!

*Header photo courtesy of Shutterstock

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