Kayla Galloway | Contributor

Buying a home in California is not an easy task, but a new state program launched Monday for first-time homebuyers aims to make the process a little easier. The California Dream For All program provides homebuyers with financial assistance equal to 20% of a home’s purchase price. Those funds can be used for a downpayment and closing costs when purchasing your first home.

How Does the California Dream For All Program Work?

The program offers first-time homebuyers in California a shared appreciation loan of up to 20% of the cost of the home. If you’re buying a $500,000 home, you’d receive 20%, or $100,000, to help with a downpayment and closing costs. Once the homebuyer sells their home at a later date, they would be required to pay back the 20% assistance, plus 20% of the home’s appreciation. If your $500,000 home sells in five years for $700,000, you’d owe 20% of $200,000 appreciation — or $40,000 — in addition to the original loan. If you sell your home and it hasn’t grown in value, you’d only pay back the original 20% loan, according to the California Housing Finance Authority.

Who is Eligible?

This program is open to first-time homebuyers in California — meaning you’ve never owned a home. A first-time homebuyer is also someone who owned a home three or more years ago and sold it, according to the CalHFA. Borrowers must also plan to live in the new property they are buying. The program does not allow for non-occupant co-borrowers or co-signers. In addition to being a first-time homebuyer, borrowers must meet income requirements depending on their county. In Los Angeles County, borrowers must make under $180,000 per year. The limits vary depending on what California county you live in, but range from $159,000 to $300,000.

How To Apply for the Dream For All Shared Appreciation Loan

The program is offered through private loan officers, according to CalHFA.

How Much Money is Available?

The state has allocated about $300 million toward the California Dream For All program, according to State Treasurer Fiona Ma. This will provide assistance for an estimated 2,300 homebuyers in California.

Find your latest news here at the Hemet & San Jacinto Chronicle

The post California’s New Dream For All Program Provides Assistance to First-Time Homebuyers. Here’s How It Works appeared first on The Hemet & San Jacinto Chronicle.

Freedom Mortgage, the premier VA lender in the United States, offers tips and advice for service members and veterans to ensure a successful home buying experience.

1. Have some cash on hand. Although a VA loan requires no down payment, sellers may not cover closing costs in today’s competitive real estate market, so it is best to budget for some funds when you schedule your closing. Closing costs can range from 3% to 5% of the home price. This includes the VA funding fee, which can be as high as 3.6% of the loan amount, although the VA funding fee is waived for Purple Heart recipients and disabled veterans.

2. Have proof of income. Proof of income is required for a VA loan, so active service members will need to have a job lined up after discharge. Also, obtain a loan pre-approval letter (rather than a pre-qualification letter), which will show that your credit and income have been professionally reviewed and that you are a qualified buyer.

3. Have options. Shop around and compare a VA loan to other loan options to see which is a better deal for you. Most importantly, don’t overextend yourself and buy a more expensive home than you can currently afford. If the rate is relatively low and you are comfortable making the monthly payments, you have a good deal.

4. Have good credit. Visit annualcreditreport.com, a legitimate website used by the three major consumer credit reporting agencies and get a free credit report.

The median credit score is a little above 700 and if your score is lower, you may pay a higher interest rate or higher costs. Some additional tips include:

Veterans who are current homeowners should take the opportunity now to refinance to a lower rate; check out VA IRRRL streamline refinances for veterans.

Disabled veterans have additional benefits from a VA loan, as they are exempt from the VA funding fee. Current homeowners considering cash-out loans can consider a conventional loan.

VA loans have a funding fee of up to 3.6%, but that may be a better deal than the high interest rates of other loans.

Last, don’t forget to request a Loan Estimate, or “LE,” from lenders when shopping around for the best mortgage. The LE will outline all relevant program details and costs that you can expect at closing.

Note: these are general information, each loan is unique and customized to the borrower. Call 833-687-1212 to speak with an experienced Freedom Mortgage loan officer who can answer questions and provide more information based on your needs.

NewsUSA | Contributed

Find your latest news here at the Hemet & San Jacinto Chronicle

The post What You Need to Know about a VA Loan appeared first on The Hemet & San Jacinto Chronicle.