California is offering two mortgage programs to help first-time buyers purchase homes.
People who haven't owned a house in three or more years can qualify for the loans, as can U.S. veterans and those willing to buy homes in certain low-income neighborhoods in Stanislaus, Merced and San Joaquin counties.
The California Housing Finance Agency unveiled its Cal30 loan and Homebuyer's Downpayment Assistance Program this week.
The state agency's loan programs and some of its grants can be combined with California and federal tax credits to dramatically lower the cost of buying a home.
"You can add on a lot of layers (of government subsidies) to make homeownership more affordable," said Evan Gerberding, CalHFA's spokesman. "We're doing what we can to help out. It's a great time to buy a home."
The Cal30 loan is similar to a loan insured by the Federal Housing Administration.
"It's a very safe, fixed-rate, 30-year loan," Gerberding said.
The interest rate on Cal30 loans this week was 5.625 percent. Down payments of 5 percent of the home's price are required, and borrowers must have a minimum credit score of 640.
The state-backed loans are designed primarily to help middle-income families buy their first home. To qualify for those mortgages in Stanislaus County, for instance, a family of four can earn up to $71,500 a year, and the loans can be used to buy homes priced up to $370,266.
There are exceptions: People who are willing to buy homes in low-income neighborhoods, including several parts of Modesto and Turlock, can get loans of up to $452,547, and they don't have to be first-time buyers.
Those who are first-time buyers, however, may qualify for the California Homebuyer's Downpayment Assistance Program. That program loans buyers 3 percent of the home's price for their down payment and closing costs. It can be used with Cal30 and FHA loans.
"You don't even have to worry about repaying that loan until you sell the house, refinance the mortgage or pay the mortgage in full," Gerberding said. Until then, no payments are due and interest on the loan (currently set at 3.25 percent) is deferred.
Besides getting the down payment loan and the relatively low-interest Cal30 loan, California home buyers may qualify for other incentives, such as:
The School Facility Fee Down Payment Assistance Program, which gives new home buyers rebates of some of the funds paid to the state by homebuilders. The size of the grants vary by subdivision, but they amount to more than $7,000 at some Stanislaus County developments.
California is offering new home buyers up to $10,000 in state income tax credits. Those credits are provided on a first-come, first-served basis up to $100 million statewide.
The federal government is offering up to $8,000 in tax credits to first-time buyers who purchase homes before Dec. 1.
For more information about Cal30 and down payment loans, which can be made only through select mortgage brokers and banks, go online to www.calhfa.ca.gov.
Bee staff writer J.N. Sbranti can be reached at firstname.lastname@example.org or 578-2196.