Home buyers loan which allows first-time buyers to borrow up to 10% of the purchase price and have the debt forgiven if the buyer lives in the home for 5 years.
The Forgivable Equity Builder Loan allows qualified, first-time buyers to borrow loans, have debt forgiven and is available to middle-income families making less than 80% of their county’s annual median income. California lawmakers have designated $100 million in the state budget for the first-time homeowner loans, with the goal of helping working families with enough income to pay a mortgage but not enough savings to make up for a down payment.
Eric Johnson, spokesman for the California Housing Finance Agency, told Mercury News that California wants to encourage families to build generational wealth through long-term ownership. The gap in generational wealth has been particularly wide in Black, Hispanic and some immigrant communities in the state, and the program aims to help aid those communities become long-time home owners. “The down payment and closing costs are a real hump,” he said. These efforts come as cost of living in the state of California has considerably risen in the last few years, especially for Northern California - the median price of a Bay Area home in March was $1.4 million, according to the California Association of Realtors.
California’s loan program has already received dozens of applications, Johnson said, and the agency does not limit the size of the loan. More information is available with preferred loan officers listed on CalHFA’s website.