Options for Homebuyers
Options for Homebuyers
1. Loan Types
- Conventional Loans: Typically require higher credit scores and down payments (3–20%), but offer competitive rates.
- FHA Loans: Backed by the Federal Housing Administration; allow down payments as low as 3.5% and more flexible credit requirements.
- VA Loans (for veterans and active duty): No down payment, no private mortgage insurance (PMI), and competitive rates.
- USDA Loans (for rural areas): Zero down payment; income and location restrictions apply.
2. First-Time Buyer & Down Payment Assistance
- CalHFA (California Housing Finance Agency):
- CalHFA FHA/Conventional First Mortgage Loans
- MyHome Assistance Program – up to 3.5% of the purchase price for down payment/closing costs
- ZIP (Zero Interest Program) – silent second loan for closing cost assistance
https://www.calhfa.ca.gov/ - Local City/County Programs: The City of San Diego and some of the counties offer their own down payment or closing cost programs. Check with local housing authorities.
- WISH Program (Workforce Initiative Subsidy for Homeownership):
Matched savings program through partner banks, offering up to $22,000 in down payment assistance.
3. Grants & Specialty Programs
- GSFA OpenDoors – Provides down payment assistance (DPA) and is available to both first-time and repeat buyers.
- Bank Programs – Some banks (e.g., Bank of America, Chase, Union Bank) offer grants for closing costs or down payments.
- Community Seconds – Allows layering of multiple assistance programs.
4. Home Types & Purchase Options
- Single-Family Homes
- Condos and Townhomes
- Manufactured Homes (must be on permanent foundation and approved by lender)
- Multi-Unit Properties (2–4 units): Live in one unit, rent the others (can qualify for FHA or VA).
5. Ownership Strategies
- First-Time Homebuyer: Can access the most grant/assistance programs.
- Co-Buying: Buy with friends/family using a shared equity agreement.
- Assumable Mortgages (VA/FHA): Take over a seller’s loan with a lower interest rate.
6. Tax Benefits
- Mortgage Interest Deduction (if itemizing)
- Property Tax Deduction
- MCC (Mortgage Credit Certificate): Ongoing federal tax credit for a portion of interest paid on the mortgage (offered by some agencies).
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