I recently met a very nice couple at an open house that I was hosting. They were first-time buyers and had been pre-approved with a CalHFA loan. Typically, these loan programs are difficult to work with and other Realtors don’t understand the loans very well, so they tend to shy away from them and the buyers that have them.
Anyway, this family started telling me about the terms of this new loan program and I was like, What? No! They must be mistaken. Financing programs are not set up like this and it sounded way too good to be true. I took their information and asked if I could contact them and speak to their lender. I have to tell you that I was very surprised and suspicious in hearing the details.
Essentially, the state of California is giving away money right now to encourage or expand the opportunities for first-time buyers to get into a home; i.e., The California Dream For All Loan Program.
Fast forward and within two weeks the buyers and I found a home that they liked. There were four offers on that home and we ended up winning because the offer we wrote was strategic and spoke to the seller's specific needs.
Now this loan program was just launched Monday, so the offer was written knowing that the buyers would have to perform “as if” they were approved and in this program already. (We had a backup plan just in case, so don’t freak out that the buyers were at risk at all.)
The buyers paid for their appraisal, a handful of inspections and continued to provide their lender with updated documentation. I am happy to share that this loan is sailing through the process right now!
The lender is able to close this early, the appraisal was completed early and the buyers were also able to get a nice-sized seller credit after finding some issues with the house that were unknown at the time of submitting their offer.
The buyers will move into their very first home in a couple of weeks! They are ecstatic and beyond feeling grateful for this opportunity via this loan program. They did not have to put any money down for the mortgage. The state loaned them 20% of the sales price to use for their down payment. They have had their closing costs mostly covered by the seller credit and were able to “buy down” their mortgage rate with some of those funds as well.
Amazing! And honestly a perfect example of how this program was intended. Want to learn more?
If you are a first-time home buyer (or haven’t owned a home in the last three years), then you can qualify for this program.
Income must be under $282,000 (single or couple) for Contra Costa County)
Credit score of 680 FICO minimum
Debt to Income ratios below 45-50%
Your mortgage will be a conventional (with conforming loan limits) first mortgage and the Dream for All down payment assistance loan (think silent second loan that you are not paying anything on while you own that home).
Some of the small print
You will not make any payments on the 20% down payment assistance program. You will not accrue interest on that loan either. You will need to pay that loan back plus share some of the equity profit (if any) when you sell your home.
Want to hold on to that home for 3 years, 7 years or even 30 years? Totally fine! Sell it whenever and then you pay back this down payment assistance loan plus a percentage on appreciation. Are you kidding me?
The state has set aside only $300 million for this program. Most mortgage lenders are busy checking qualifications on first-time buyers right now. Burning the midnight oil for sure!
My 2 cents: The program is real! It will run out of money soon and if you know any first-time buyer, please tell them to call me ASAP.
This is a phenomenal program that I want to get as many buyers into as possible, while we still can. As you can see from my personal experience, this is a once in a lifetime opportunity!
And operators are standing by!
