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 In order to help low-income individuals to buy their first home, the Los Angeles, San Bernardino, Orange, and Riverside Counties have created programs to cover the needs of this economic group. The help provided generally includes financial assistance for a down payment, closing costs, and loan programs with low interest rates.
Los Angeles County
The Community Development Commission (CDC) offers the following programs:
*Home Ownership Program (HOP). Can provide anywhere from $50,000 to $60,000 for the down payment. This program offers a 0% interest rate, and the opportunity to postpone any payments until the house is sold, transferred, refinanced, or the first mortgage is paid.
*American Dream Down Payment Initiative (ADDI). When a solicitor has been approved for the HOP program, he/she is also approved for ADDI. The money granted through ADDI is used to cover closing costs and helps to cover the down payment with either $10,000 or 6% of the total house value, whichever is greater. HOP and ADDI constitute a second mortgage.
*Mortgage Credit Certificate Program (MCC). Functions as a credit certificate in the first mortgage and it is used in your tax returns every year. The money is returned by the IRS in one whole payment at the end of the year or in monthly payments for 12 months, depending on the taxpayer’s needs. The recipient will have credit every year given that he keeps the property, the home is his principal residence, and he maintains the original mortgage. Whoever qualifies for this program does not qualify for the previous two.
*Southern California Home Financing Authority (SCHFA). A program carried out by the Los Angeles and Orange Counties, which provides a mortgage loan for up to 30 years with a fixed interest rate lower than the general market interest rate. You can also obtain assistance for the down payment through SCHFA. Whoever qualifies for this program does not qualify for the previous three.
For other terms and information about these programs call (323) 890-7248 (Spanish) or visit www.lacdc.org. Riverside County
The Riverside County Economic Development Agency offers the following programs:
*First Time Home Buyer Down Payment Assistance Program. It can cover up to 20% of the total value of the property.
*First Time Home Buyer Closing Cost Assistance Program. The assistance amount is $10,000 or 6%.
The total amount of both programs must not exceed $75,000. This program is considered a second mortgage, does not require a monthly payment, and the interest rate is 0%. The buyer must live a minimum of 15 years in the property; in case the home is sold before this time period, it must be sold to a low-income person or else the original buyer must pay back the loan.
For additional terms and information about these programs call (951) 343-5471 (Spanish) or visit www.rivcoeda.org.
Orange County
The Orange County Housing & Community Development Department offers the following program:
*Mortgage Assistance Program (MAP). Provides assistance with the down payment and closing costs. A fixed interest rate of 3% is applied.
For additional terms and information about this program call (949) 859-9255 or visit www.ochousing.org.
San Bernardino County
The San Bernardino County Department of Economic and Community Development offers the following program:
*Homeownership Assistance Program (HAP). Provides assistance to cover closing costs and GAP, a subsidy that covers the financial gap between the property value and the first mortgage.
These programs don’t require a monthly payment and have an interest rate of 0%, they are tax deductible, and the loan expires when the property is sold, transferred, or refinanced.
For additional terms and information about this program call (909) 388-0900 (Spanish) or visit www.co.san-bernardino.ca.us/EDA/.
Loan Eligibility
The following requirements apply to the programs mentioned above, except for MCC and SCHFA.
- Must be the borrower’s first home and must be occupied as his principal residence.
- Family income must not exceed 80% of the national average.
- The maximum purchase price must not exceed the limits set by the county.
Other requirements, which vary by county, are to attend an informative eight-hour seminar, not have a homeownership title for the last three years, pay between 1% and 3% of the down payment, work or live in the county during the year before the loan was requested, and comply with certain credit requirements.
Your Real Estate Agent will inform you if you qualify for government assistance programs. Most counties provide approved agents, who will help you with the process of purchasing your first home.
With the assistance offered by the counties it’s possible to live the American dream and own your own home. |
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