The state of California has launched a new equity builder loan program in hopes to help first-time buyers become homeowners in a highly competitive market. This program is called a forgivable equity builder loan and it allows qualified first-time buyers to borrow up to 10% of the home’s purchase price and have the debt forgiven as long as a buyer lives within that home for five years.
California has a New Forgivable Equity Builder Loan Program
This Equity Builder Loan are available for middle-income families that make less than 80% of the county’s annual median income in which they plan to purchase a home. For example, in the Bay Area counties, anyone making less than $120,000 a year is eligible.
Lawmakers in the state set aside $100 million of the state budget to help first-time homeowners with loans to achieve the goal of homeownership within the state. This is aimed to help working families that have enough income to afford a mortgage but may not have enough for a down payment be able to obtain a loan.
The spokesman for the California Housing Finance Agency has told news outlets that the state is hoping to help families build generational wealth through the means of long-term homeownership. For some of California’s families making a down payment to qualify for a mortgage and having cash available to cover closing costs can be a huge setback.
This forgivable equity builder loan program, it will allow a homeowner to develop equity in the property more quickly and hopefully enable them to refinance at a lower interest rate after the required five-year period has ended. This loan program has already received many applications. The nice thing is that the agency is not limiting the size of the loan. First-time buyers able to qualify for this program will need to attend a first-time homeowner class.
In addition to this new loan program, the California Department of Housing and Community Development will also be using $66 million towards new grants to help homeownership for low-income families and residents. This program is going to provide funding for 33 low- and moderate-income housing projects all across California. These grants have a focus on helping low-income residents become homeowners or enabling them to renovate and stay in existing homes.
Finding mortgage possibilities in a difficult market
If you are looking for help to find your best mortgage options to navigate the affordability of homes or the ability to qualify for a mortgage it is a good idea to speak with an expert mortgage broker. A mortgage broker can help to break down all of the current options available to you beyond what may be offered if you were to walk into a traditional bank. A mortgage broker makes it their job to be aware of every option available to help get buyers into affordable homes.
For more information on all of the mortgage options available in Mission Viejo and the state of California please contact me anytime. I focus on helping buyers in unique situations to obtain mortgage financing.
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