Buying a home is not only a responsibility but also an opportunity. After all, when you own a home, you have the ability to do anything with it you like. You can paint walls, redo the kitchen and even plant a small garden, if that is what you want to do. Prior to the time that you sign on the dotted line, however, it is good to know that you have all of your ducks in a row.
If you are a first time homebuyer, there are a number of programs available that can work to your advantage. Not only can they help to keep your payments low, they may help with down payments and can even reduce the taxes you pay at the end of the year.
What exactly is a first time homebuyer in the state of California? You might be surprised to learn that it goes beyond those who have never purchased a home before, although they would certainly qualify. The California Housing Finance Agency (CalHFA) also considers you to be a first time homebuyer if you have not purchased a home in the past 3 years. Additionally, you if you or your spouse has not purchased a home in the past 3 years, you would both qualify.
The following list of programs is available to first time homebuyers in California who meet the requirements.
Those requirements may vary from one program to another but they could include minimum credit score, minimum or maximum household income and the size of your household.
Homebuyer Education Course
In order to take advantage of some of the programs for first time homebuyers, you may need to take an educational program. The program is designed to help you understand the responsibilities of home ownership. It can be taken online or in person.
Down Payment Assistance
The CalHFA also offers assistance programs to help you make your down payment. They include the MyHome Assistance Program, which offers a deferred payment junior loan of up to 3% of the appraised value or purchase price. It must be combined with the first mortgage loan program from CalHFA. You may be able to combine the MyHome Assistance Program with the CalHFA Zero Interest Program, which can help with down payment or closing costs.
Extra Credit For Teachers – If you are a teacher, down payment assistance may be available through this program. It is given as a deferred payment junior loan.
Mortgage Credit Certificate (MCC)
This is a tax credit program available for first time homebuyers in California. It works by reducing your potential federal income tax liability. In doing so, it helps first time home buyers to convert some of their mortgage interest into tax credit on their annual income tax return. This program can be used with a government or conventional first mortgage but is not available if you use bond financing that is tax exempt.
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