California first time home buyersprogram 2024

First-Time Homebuyer Programs and Incentives for Californians in 2024

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Buying your first home? We understand the challenges. The competitive real estate market in the Golden State can make the prices very high. Thankfully, you can seek a first-time home buyer program for a loan to offer you an extra hand. In 2024, you can avail of various incentives to make your purchase smoother. Here is what you should look for.

CalHFA First-Time Homebuyer Programs

CalHFA, or the California Housing Finance Agency, has several programs to help first-time homebuyers get their dream home.

  1. CalHFA First Mortgage Loan Programs

Explore various first mortgage loan programs providing affordable financing options. These loans have lower interest rates and flexible terms, unlike conventional loans. The options include:

  • CalHFA FHA Loan Program: The Federal Housing Administration (FHA) backs this program, which offers easier credit qualifications and lower down payment requirements.
  • CalHFA VA Loan Program: This loan is designed for active-duty military personnel and veterans and provides benefits like no mortgage insurance (PMI) and no down payment.
  • CalHFA USDA Loan Program: Homebuyers in eligible rural areas can get this loan. It offers 100% financing with no down payment requirements.

  1. CalHFA MyHome Assistance Program

This program provides a deferred-payment junior loan of about 3.5% of the home’s appraised value or purchased price, whichever is less. You can use it to close costs or down payments. The MyHome Assistance Program simplifies buying your first home.

  1. CalHFA Zero Interest Program (ZIP)

It provides a zero-interest deferred-payment loan you can use for closing costs. The ZIP program does not need monthly payments and is only due when the home is refinanced, sold, or paid off. You can combine this program with other CalHFA first mortgage loan programs for extra savings.

Mortgage Credit Certificate (MCC) Program

The MCC is a federal program that enables first-time homebuyers to get a tax credit for a portion of the mortgage interest paid annually. It offers substantial tax savings, making buying your dream home affordable. Local Californian government agencies administer this program.

What do you need to qualify for the MCC program? You must meet specific income and purchase price limits. You must use the home as your primary residence. You can claim the MCC tax credit every year as long as the loan lasts.

Local First-Time Homebuyer Programs

Apart from state-wide programs, many Californian counties and cities offer their own first-time homebuyer assistance programs, with notable examples being:

  1. Los Angeles County: It offers the HOP or Home Ownership Program, which gives down payment assistance as a second mortgage. It is meant for moderate and low-income families and offers deferred payments with 0% interest.
  2. San Francisco: The Mayor’s Office of Housing and Community Development (MOHCD) in San Francisco offers various programs, such as the First Responders Downpayment Assistance Loan Program (FRDALP) and the Downpayment Assistance Loan Program (DALP). These programs provide financial assistance to first-time homebuyers with their down payment and closing costs.
  3. San Diego: The San Diego Housing Commission offers the First-Time Homebuyer Program, which gives deferred loans and closing cost help to moderate and low-income homebuyers. This program by the SDHC is designed to make a first-time homebuyer in California afford their first home without worrying.

Federal Programs and Incentives

You can also check the various federal programs and incentives, like the:

  1. Federal Housing Administration (FHA) Loans: This first-time homebuyer program is very popular because its loans offer low down payment options, which can be as low as 3.5%. The credit requirements are lenient, and these loans are backed by the federal government, so they are less risky for lenders.
  2. S. Department of Veterans Affairs (VA) Loans: VA Loans, as the name suggests, are for veterans, active-duty service members, and eligible surviving spouses. They offer various benefits, such as competitive interest rates, no PMI, and no downpayment.
  3. S. Department of Agriculture (USDA) Loans: These are for homebuyers in eligible rural areas. They offer 100% financing, which means you don’t need to pay down payments. They come with low interest rates and reduced mortgage insurance costs.

The Takeaway

We understand that the first homebuying process can be daunting, but it is manageable with the right programs and incentives. California has a wealth of resources for first-time homebuyers, whether you need state, local, or federal assistance programs. Explore the opportunities and make your dream home yours. If you need a first-time home buyer mortgage, consult ALT Financial Network, and we will help you get your first abode.

Can You Buy Land with a VA Loan?

Can You Buy Land with a VA Loan?

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The VA loan program provides a significant benefit to veterans, active-duty service members, and eligible surviving spouses. These loans, backed by the U.S. Department of Veterans Affairs, offer numerous advantages, such as no down payment, competitive interest rates, and no private mortgage insurance (PMI). However, when buying land, the rules surrounding VA loans can be a bit more complex. This blog post explores whether you can buy land with a VA loan and the options available for those who want to purchase land.

Understanding VA Loans

VA loans are for veterans and service members who want to buy, build, repair, retain, or adapt a home for personal occupancy. These loans offer favorable terms compared to conventional loans, such as:

– No down payment: Buyers can often secure a home without needing to put any money down.

– Competitive interest rates: VA loans generally have lower interest rates than conventional loans.

– No PMI: Borrowers need not pay for private mortgage insurance, which is typically required for loans with less than a 20% down payment.

– Lenient credit requirements: VA loans often have more flexible credit requirements, which makes them accessible to more borrowers.

Can You Buy Land with a VA Loan?

The short answer is that buying land alone with a VA loan is generally not possible. VA loans are primarily intended for purchasing or refinancing homes. However, there are specific scenarios and extra steps you can take to use a VA loan for acquiring land.

Purchasing Land and Building a Home

One of the most common ways to use a VA loan to buy land is by purchasing the land along with building a home on it. This process typically involves a construction loan, which you can convert to a VA loan upon completion of the home. Here is how it usually works:

  1. Construction Loan: You start with a construction loan, which provides the funds needed to purchase the land and build the home. These loans often have higher interest rates and stricter requirements.
  2. VA Loan Conversion: Once you build the home, you can refinance the construction loan into a VA loan. It allows you to take advantage of the VA loan benefits like lower interest rates and no PMI.

This approach is ideal for veterans who want to build a custom home on a specific piece of land.

Buying Land with the Intent to Build Later

If you plan to buy land and build a home later, you must secure a different type of financing for the land purchase initially. Once you are ready to build, apply for a VA construction loan to cover the construction costs. The key here is that you cannot use the VA loan solely for land purchase. It must be tied to the construction of a home.

Combining Land Purchase with a Home

In some cases, you might find land that already has a home or other structures on it. If the property includes a home that meets VA standards and you plan to occupy it as your primary residence, you can use a VA loan to purchase the property. This scenario is straightforward because the loan is used to buy a home, with the land being part of the overall property.

Alternatives for Buying Land

If you are a veteran who wants to buy land without immediate plans to build a home, consider these options:

  1. Land Loans: These loans are designed for buying land. They typically require a higher down payment and have higher interest rates compared to VA loans.
  2. Personal Loans: Depending on the cost of the land, you might seek a personal loan. These loans often have shorter terms and higher interest rates.
  3. Seller Financing: Some sellers may finance the purchase directly, allowing you to make payments over time.
  4. Home Equity Loan: If you own a home with significant equity, you might be able to use a home equity loan to finance the land purchase.

The Takeaway

While VA loans are usually used for buying or refinancing homes, you can use them in specific scenarios to buy land, especially with plans to build a home. By understanding the requirements and exploring alternative financing options, veterans and service members can find a path to owning land and building their dream homes. It’s essential to work with knowledgeable lenders and real estate professionals who understand all the aspects of VA loans to ensure a smooth and successful process.