Down Payment Assistance Programs in California

For many California buyers, the hardest part of buying isn't the monthly payment. It's coming up with the down payment and closing costs. Down payment assistance (DPA) programs are designed to help with that gap for eligible buyers.

One important note up front: DPA programs change often. Funding can run out, guidelines get updated, and programs open and close. I won't list specific amounts or availability here because they may be out of date by the time you read this. Ask me what's currently available for your situation.

Who offers down payment assistance

• State programs: California has a state housing finance agency, CalHFA, which has offered assistance programs paired with first mortgages.
• City and county programs: many local governments run their own programs, often with income limits and boundaries.
• Lender and nonprofit programs: some lenders and nonprofits offer grants or second loans.

Not every lender participates in every program, and some programs require specific lenders or homebuyer education.

Common structures

Deferred-payment second loans

A second loan that doesn't require monthly payments, but is repaid when you sell, refinance or pay off the first mortgage. Some accrue interest; some share in appreciation.

Forgivable loans

A second loan that may be forgiven after you live in the home for a certain number of years, if you meet the program's conditions.

Grants

Funds that typically don't need to be repaid, though conditions may apply.

Repayable second loans

Some assistance is a second mortgage with a monthly payment, usually smaller than the first.

Typical eligibility factors

Requirements vary by program, but often include:

• First-time buyer status, which often means you haven't owned a home in the past three years
• Income limits based on household size and county
• Purchase price limits
• Minimum credit score
• Homebuyer education course
• Owner occupancy: you must live in the home
• Property location for city or county programs

Advantages

• Lets you buy sooner with less cash
• Can cover part of closing costs as well as down payment, depending on the program
• Some funds may be forgiven over time

Trade-offs to consider

• Repayment at sale or refinance: a deferred loan still has to be paid back. Some programs share in your home's appreciation, which can be significant over time.
• Refinancing can be harder: the second loan may need to be paid off or subordinated.
• Limits on price and income may restrict where and what you can buy.
• Time: some programs add steps, approvals and processing time.
• Rate and fees: the first mortgage paired with a program may be priced differently from other options.

An example

These numbers are for illustration only. A buyer qualifies for a deferred second loan equal to a portion of the price, paired with an FHA first mortgage. They bring less cash to closing and buy two years sooner than they would have on their own. When they sell eight years later, the second loan must be repaid from the proceeds, plus any interest or shared appreciation the program requires. Understanding that number up front is important.

Getting started

• Check whether you might be a first-time buyer under program definitions.
• Gather your household income information.
• Ask me which programs currently fit your price range and county.

You can also read my down payment assistance overview and first-time homebuyer page.

Questions?

If down payment is what's holding you back, contact me and we'll look at what may be available right now. You can also start your pre-approval.