The Loan Lady Blog

Do you want to buy a home but find yourself short on funds for a down payment?

You may make an income that will qualify for a loan, but are short on cash.  There are a number of down payment assistance programs in California that can help, some of which can be used for closing costs as well.  These programs are designed for people of low to moderate income, with income levels that are pretty generous, or for people in special groups, such as teachers.

These programs are often called "silent second" loans.  No monthly payments are required but the interest accrues until the loan is paid off through a sale or refinance.  Some programs involved an equity share agreement, in which the entity loaning the funds receives a percentage of the increased equity when the property is sold.

For example, the city of San Jose has a program called Welcome Home, which offers up to $25,000 in down payment assistance, at an interest rate of 3% with payments deferred.

The California Housing  Down Payment Assistance program (CHDAP) provides up to 3% of the sales price, also at a low deferred interest rate.  These funds can be used for the down payment or for closing costs.

There are down payment assistance programs for San Jose teachers and staff, and for San Jose State teachers and staff.

Very soon, I expect to have the guidelines for using the $8000 tax credit as part of the down payment.

Whatever state or city you live in, a good mortgage consultant can help you explore your assistance options and work to find funds to help you purchase a home.  Give me a call if you want more information about the local programs.