California Down Payment Assistance Programs

California Down Payment Assistance Programs

Thanks to the many California down payment assistance programs available, you may be able to get help buying a home. The main program that consumers can qualify for is known as CHDAP. This is a loan that has to be repaid, but the repayment date is deferred and the interest is extremely low. The maximum amount is either 3% of the purchase price of the home or 3% of the appraised property value whichever is the least.

This type of California down payment assistance is only offered through a CalHFA approved lender. It is limited to only first time homebuyers in California. The property can be located anywhere in the state. To qualify for the down payment assistance program, the applicants must meet income and credit score guidelines. A home buyer education class must be completed either face to face or online.

To find out if you meet the income guidelines, use the charts offered online that cover the income maximums. They are broken down by the number of people in the family and also the county where the property is located in California. This chart helps a person or family to quickly determine if they meet that first but very important piece of eligibility.

The minimum credit score of the consumer must be a 640. With a couple, the credit score that is the highest can be used to meet that eligibility criterion. For those that have a lower credit score, there are free classes and counseling that can help them to successfully budget and to improve their credit score.
This can take time, but once it is done then they can apply for the assistance to buy a home.

Other stipulations of this California down payment assistance program are that all signers on the loan must reside in the home within 60 days. Some exceptions include those that may be on a military deployment. The property can’t exceed 5 acres and it can’t include a manufactured home on the property.

Below is a list of California Down Payment Assistance Programs:

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USDA Rural Loan – the purpose of the Single Family Housing Direct Home Loan is to assist low- and very-low-income applicants obtain decent, safe and sanitary housing in eligible rural areas by providing payment assistance to increase an applicant’s repayment ability. There is no down payment. Payment assistance is a type of subsidy that reduces the mortgage payment for a short time. The amount of assistance is determined by the adjusted family income.

VA Home Loan – VA helps Service members, Veterans, and eligible surviving spouses become homeowners. As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy. There is no down payment as long as the sales price doesn’t exceed the appraised value.


Low Down Payment Mortgages – mortgages that require up to 3.5% down payment

FHA Mortgage Loan – the purpose of the FHA Home Mortgage Loan is to provide mortgage insurance for a person to purchase or refinance a principal residence. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD. A down payment of just 3.5 percent is required and may consist entirely from “gift funds.” The credit score requirement is 580.

Home Possible® Advantage Mortgage – the purpose of the Home Possible® Advantage mortgage by Freddie Mac is to offer low down payments for low- to moderate-income homebuyers or buyers in high-cost or underserved communities. Down Payment can come from a variety of sources, including friends and family, employer-assistance programs and secondary financing.

The HomeReady™ Mortgage – the purpose of the HomeReady™ mortgage by Fannie Mae is to provide flexibility for applicants buy home with down payments as low as 3%, below market mortgage rates, co-borrower flexibility, additional income sources and reduced mortgage insurance costs.

California Down Payment Assistance Programs

CalHFA Zero Interest Program ZIP is a deferred payment junior loan of 3 percent of the first mortgage loan amount which can be used for California down payment assistance.

Extra Credit Teacher Program The ECTP is an exclusive opportunity in California which provides deferred payment junior loans from $7,500 to $15,000 to assist with California down payment fees. The program is only available when used in conjunction with a CalHFA first mortgage loan, and is reserved for eligible teachers, administrators, classified employees and staff members working in California schools.

Homebuyer Down Payment Assistance Program The CHDAP is a deferred payment junior loan – up to 3 percent of the purchase price or appraised value, whichever is less. Financing can be used to cover California down payment and/or closing costs. Only California borrowers who are first time home buyers can qualify. Qualifying income limits and purchase price limits are set by county.

HUD Programs

The US Department of Housing and Urban Development (HUD) offers the following programs:

Good Neighbor Next Door Program

The Good Neighbor Next Door Program was created by U.S. Department of Housing and Urban Development (HUD) to help law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters and emergency medical technicians buy homes. The biggest benefit of the Good Neighbor Next Door Program is the 50% discount of the home’s list price. The only catch is that the home owner must commit to live in the property for 36 months as their sole residence.

To learn more about the Good Neighbor Next Door Program, click here.

Section 184 Loan – The Indian Home Loan Guarantee Program

The Section 184 Indian Home Loan Guarantee Program is a mortgage for American Indian and Alaska Native families, Alaska villages, tribes, or tribally designated housing entities. In 1992 Congress created this program to help Native American Communities with homeownership.

Section 184 loans helps borrowers buy homes with a low down payment and flexible underwriting. Moreover, the loan does not need to be used only on properties on native lands. Purchase of an existing home for single-family residences. Also allowed are new construction, rehabilitation, and refinance.

To learn more about Section 184, click here.

California Housing Agencies

California housing agencies are your best resource for down payment assistance programs. Through funding from HUD, the purpose of these agencies is to ensure that affordable housing is available for everyone.