In California’s Bay Area, a new opportunity is available for people wanting to buy their first home but finding it hard to save for the down payment.
They can now get a loan of up to $200,000. The program is designed to support those with lower incomes to achieve their dream of owning a home.
Why This Matters
California is known for its costly housing market, especially in the Bay Area, where home prices are among the highest in the country. As of February, the average price for a home in California was $832,500. This price is a significant jump of 6% from the previous year and nearly 70% higher than prices in February 2020.
In places like San Francisco and San Jose, the average home price reached around $1.4 million.
With the increase in home prices and mortgage rates staying between 6 and 7 percent, it has become challenging for many Californians, especially those earning less, to buy a home.
Read more: The Age of First-Time Homebuyers is Reaching New Heights
Key Program Details
The Home Access Program, established by the nonprofit Housing Trust Silicon Valley based in San Jose, aims to assist potential homeowners in the Bay Area by offering them down payment help. Qualified first-time homebuyers could receive assistance worth up to 40% of the purchase price of the home, with a maximum of $200,000.
To apply, buyers need to be looking at homes in Alameda or Contra Costa County and must not earn more than 80% of the median income for the area they want to buy in. Household income limits vary depending on the size of the family, ranging from $84,600 for a single person up to $140,150 for a six-person household.
Additionally, applicants must get preapproval from a lender that participates in the program, save at least 3% of the home's price for a down payment, and complete an eight-hour homebuyer education class approved by the Department of Housing and Urban Development.
Eligible homes include single-family residences, townhomes, or condos in the designated counties.
Loan Terms
The down payment assistance comes in the form of a 30-year deferred loan, which means there's no need to make monthly payments. However, the loan, along with accrued interest, must be paid back after 30 years or if the property is sold earlier. The loan requires buyers to also contribute at least 3% of the purchase price.
In February, average home prices were $1,117,500 in Alameda County and $785,000 in Contra Costa County.
What’s Next
For those interested in this program and who think they might qualify, you can submit an interest form. The Housing Trust Silicon Valley states they will get back to candidates within three business days.
-
Check out: Multnomah County Reopens Low-Income Rental Assistance List: Thousands Apply in First Hours
