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CalFHA Down Payment Assistance Loan

Owning a home in California a dream for many. The Golden state is already home to many Americans and the population is always growing. With people moving around all the time there is always need for properties. But considering the demand for homes in California and the high real estate prices, there has always been a need for mortgage assistance programs, especially for first-time home buyers. That is where CalFHA comes to save the day. Learn more about the CalFHA mortgage programs from Dawn Palestini of Palestini Home Loans. Dawn has been an active loan officer in the California region for 30 years and knows all there is to know about these programs. She will be your go to for all information related to the financial options available to you and help you land the best deals that work for you long term.


What is the CalFHA Down Payment Assistance Loan?

Buying a home in California can be a major challenge financially and this becomes a major barrier for those who are low to moderate income earners. To ease the process of becoming home owners for low to moderate income earners the California Housing Finance Agency (CalFHA) offers Home Buyer Assistance Programs. The segment most affected by challenges of becoming home owners are first time home buyers and for them the CalFHA Down Payment Assistance programs was created. These are “junior” or “subordinate” loan programs.

This program works in tandem to the CalFHA mortgage programs. Using the down payment assistance programs the borrower gets 3.5% of the purchase price of the property or appraised value (whichever is the lowest of the two) to cover the down payment or closing costs.

What is the benefit of the CalFHA Down Payment Assistance?

What makes these programs special is that these loans do not have to be paid until the house is sold, refinanced or the mortgage used to purchase the property is paid off. This means that borrowers do not have to worry about repayment of two loans simultaneously and can start making payments for the CalFHA Down Payment loan after paying off the original mortgage. This way the borrower is not stuck making payments for two mortgages per month.


What are the requirements of the CalFHA Down Payment Assistance loan?

The requirements of the CalFHA Down Payment Assistance loan can be divided into two categories. There are requirements for the borrower and requirements for the property:

Borrower requirements

  • The borrower must have a credit score of 660 – 680
  • The Debt to Income ratio should not be higher than 45%
  • The borrower’s income must not exceed the limits specified by the CalFHA guidelines (they vary by county)
  • The borrower must be a first-time home buyer which means that they should not have owned or occupied a home in the last 3 years
  • The borrower has to complete a Homebuying Counselling course and present a certificate of completion

Property requirements

  • The price of the property should not exceed $765,000
  • The property must be located within the borders of the State of California
  • The property must be a single family unit home
  • Land trusts and leaseholds are not eligible
  • Maximum size of the property must not exceed 5 acres
Palestini Home Loans

Dawn Palestini
Loan Consultant
NMLS ID #361616
CA Lic. #CA-DBO361616
490 Chadbourne Rd #A172
Fairfield, CA 94534


We've been helping customers afford the home of their dreams for many years and we love what we do.

Xpert Home Lending, Inc.  is a Real Estate Broker Licensed by the California Department of Real Estate DRE #02166758  NMLS: 2179191

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