Everybody’s heard about this new California program where they’re willing to give you 20% for a down payment to buy a home. It officially rolled out today. Let’s jump right into this video is going to be just a little bit longer than normal.Cal HSA, if you don’t know who that is they are a housing finance authority for the state of California, their role is really to help the undeserved low and middle income people purchase homes. It’s not limited to low to middle income people. And this new program is shared appreciation.
And I’ll explain to right now, here’s the facts. Right now the state’s allocated about 300 million in available funds for this program. They have not indicated what will happen after the 300 million is committed, has to be a primary residence, has to be a one unit property, condo or single family is sufficient. Minimum FICO, 680. You have to be a first time home-buyer. You just cannot have owned a primary residence within the last three years.
So if you own home as a primary residence five years ago, you’re okay. You just can’t have owned a home within the last three years as your primary residence finally got to be California resident. Here’s the important stuff. They’re going to give you 20% down payment as a loan. You buy a home for $500,000. The state’s going to loan you $100,000 for a down payment.You’re only borrowing 80% of the home’s value. There’s no interest and there’s no monthly payments for that loan that they’re going to give you. Here’s what happens when you go to sell that home or refinance it.
They’re going to get their 20% back that they loaned you for the down payment and they’re going to get 20% of the appreciation.So let’s say you buy a home, it goes up 100,000 in value. You sell it in five years, they’re going to take 20,000 of that $100,000. So they’re going to loan you money, you’re going to pay it back and they’re going to get a little bit the appreciation. When do you have to repay the money? Well, if you sell the home, refinance the home or change title, they’re going to want their money.In Orange County, your income can be as high as $235,000. That’s not low to middle income. That’s as high income in Los Angeles income, but $180,000. Riverside income, about 173,000. So it’s an incredible program.
It’s a great opportunity. It’s not going to fit everybody. If you have questions about how it may impact you, a client or family member, please reach out to me so we can do a specific scenario based on your situation.