Buying a home for the first time can leave you with serious sticker shock. That’s especially in true in California, which has some of the highest property prices in the U.S. Those looking to crack the homeownership barrier in The Golden State can take advantage of several programs to help with the down payment and closing costs.

The California Housing Finance Agency, or CalHFA, has access to a comprehensive selection of homebuyer assistance programs, mostly geared toward first-time homebuyers with low or moderate incomes. In California, you’re considered a first-time homebuyer if you haven’t owned and occupied a home in the past three years. Here’s an overview of CalHFA programs that can help you purchase your first home.

CalHFA first-time homebuyer loan programs

CalHFA offers borrowers access to conventional and government-insured loan programs to help first-time buyers obtain fixed-rate loans with the option to roll in down payment and closing cost assistance.

Borrower requirements

  • Minimum credit score of 660 for conventional low-income loans and 680 for conventional standard loans
  • Debt-to-income (DTI) ratio can’t exceed 45 percent or automated underwriting or 43 percent for manual underwriting
  • Must meet CalHFA’s income limits based on your specific area
  • In most instances, must be a first-time homebuyer and a U.S. citizen, permanent resident or qualified alien
  • Attend a homebuying counseling course and present a certificate of completion
  • Meet any additional loan requirements of your CalHFA-approved lender and the mortgage insurer

An approved homebuyer counseling course can be taken online through eHome for $99, or in-person through a HUD-approved housing counseling agency or NeighborWorks America; fees vary by agency.

Property requirements

  • Sales price can’t exceed $970,800
  • Located within California and used as a primary residence
  • Single-family (one-unit) home; some condos, accessory dwelling units (guest houses and in-law quarters, for example) and manufactured homes might be permitted
  • Land trusts and leaseholds aren’t eligible

CalHFA and CalPLUS conventional loans

The CalHFA Conventional program is a first mortgage loan insured through private mortgage insurance on the conventional market. The interest rate on the CalHFA Conventional loan is fixed throughout the 30-year term.

The CalPLUS conventional loan program comes with a slightly higher 30-year fixed interest rate, but you can combine it with the agency’s MyHome Assistance program for down payment help (more on that below) and Zero Interest Program (ZIP) for closing costs. ZIP doesn’t charge borrowers interest for the assistance, which can be 2 percent or 3 percent of the purchase price. If you choose the higher assistance amount, you’ll receive a higher interest rate on the mortgage itself.

CalHFA and CalPLUS FHA loans

The CalHFA FHA Program is a loan insured by the Federal Housing Administration that comes with a 30-year fixed, low interest rate for a primary home. The FHA has specific borrowing and property requirements that must be met.

Another option: the CalPLUS FHA program. It’s another FHA-insured loan that comes with a slightly higher 30-year fixed rate, but it’s paired with the ZIP closing cost assistance.

CalHFA VA loans

The CalHFA VA program is a loan insured by the U.S. Department of Veterans Affairs. It comes with a fixed, low interest rate for a 30-year term. The VA has its own requirements for eligibility.

CalHFA down payment assistance programs

For many first-time homebuyers, saving up for a down payment and closing costs is one of the most daunting challenges to homeownership. CalHFA offers several down payment and closing cost assistance programs to help you bridge this gap. These are considered “subordinate” or “junior” loans, meaning payments are deferred until your home is sold, or your mortgage is refinanced or paid in full — and that can help make monthly mortgage payments more affordable.

CalHFA MyHome Assistance Program

CalHFA’s MyHome Assistance Program is a deferred-payment junior loan that provides up to 3.5 percent of the purchase price or appraised value (whichever is lower) to help pay for down payment or closing costs. In many cases, you can combine this assistance with CalHFA’s loan programs.

Get started

You have the lowdown on California’s assistance programs for first-time buyers, and you’re ready to get the ball rolling. CalHFA doesn’t issue loans or make application decisions. However, it has vetted a list of approved lenders you can reach out to. Generally, lenders have their own borrowing requirements, and interest rates vary. Shop around with a few different lenders to ensure you’re getting the best deal.

First-time homebuyer programs in nearby states

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