California Home Loan Options for First-time Homebuyers


by Jonathan Haeber
jonathan.Haeber@californiamortgagerate.com
California Mortgage Rate Columnist

I was looking at the latest listings for homes in California and I was astonished. Six-hundred thousand for a two bedroom in a bad neighborhood! You have got to be kidding, I said to myself. But people are paying - partly because of new government-subsidized loan options.

There is a myriad of California home loan programs to take advantage of especially if you make less than $60,000 a year. San Francisco offers homes at more than half of their market value through the Mayor's Office of Housing. If you're interested in homes outside of homeowner-friendly cities, then take a look at the following options.

Our Two Top California Loan Picks

  1. CalHFA: For over 30 years, CalHFA has provided first-time homebuyers with below market interest rates on California home loans. The requirements are easy to meet. Check if you meet the required income limit and property requirements at the CalHFA websites listed below.
  2. ACORN Housing: I recently applied for a loan through this non-profit organization. The requirements are easy to meet. Theres no private mortgage insurance (PMI) requirement, which most conventional loans with down payments of under 20% require. Rates are generally 1/2 to 3/4 of a percentage below market rates. What's nice about this 30-year fixed program is you can count "stated" second income (freelance writing, for example) in your loan application.

Rates are Risin'

Those who think the housing market is akin to 1999 stock prices - i.e. bubbleheads - may tell you not to buy. Other experts point to historically low rates as a big reason to buy now. Whatever the case, the above programs can help ease your doubts. Good Luck!

About the Author

Jonathan Haeber is a marketing writer for Discovery Channel Stores. He recently purchased his first home, and took a self-taught crash course in home mortgages. Needless to say, he's going to refinance for a 30-year fixed as soon as the banks trust him with their money.

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