Down Payment Assistance Programs For Healthcare Workers
Buying a home while also being a healthcare worker can be difficult, especially for those who want to buy a home in California. The added stress of managing your finances to fund your down payment can make a home loan seem incredibly daunting. Luckily there are some excellent Down Payment Assistance programs in California (comprised of forgivable loans as well as grant programs). In California, there are three popular Down Payment Assistance programs.
- CalHFA
- Chenoa
- GFSA Platinum
CalHFA Program
The CalHFA Equity Builder Loan is a 2nd loan that gifts first-time homebuyers in California, up to 10% of their home’s value ($30k – $50k+). These funds can be used for the down payment, closing costs, or both so buyers can close with as little as $0 out of pocket.
The 2nd loan has no payments, no interest, and has 20% of the balance forgiven each year until it’s completely forgiven after 5 years.
Program Benefits
- 10% of the purchase price ($50k+) is gifted from the state of California!
- $0 payments, 0% rate, and fully forgiven after 5 years
- Make your first home affordable
- Can be combined with Conventional and FHA loans for maximum flexibility
Program Criteria
The CalHFA loan program offers a great solution for homebuyers in California. CalHFA is available for FHA or Conventional loan types and is limited to first-time homebuyers in California. However, the way a first-time homebuyer is defined gives a little bit of flexibility. According to guidelines, a first-time homebuyer is defined as not having had ownership/title to any home in the past 3 years.
Homebuyers also should be aware of additional requirements. The minimum credit score for this program is 640. The maximum debt-to-income (DTI) ratio is 45-50%, depending on credit score. These are detailed specifics that homebuyers early in the process may not know, however, by speaking with a mortgage lender, they can look at your specific situation and go into depth about your specific financials.
Those looking to use the CalHFA program are also required to complete homebuyer education counseling through an eligible homebuyer counseling organization.
Lastly for the CalHFA Forgivable Equity Builder Loan, it’s important to note that there are income limits for this program, meaning your annual income must be less than 80% of the area median income (AMI). You can look up the median income in your area using this tool from the Department of Housing and Urban Development (HUD).
Chenoa Program
The Chenoa Fund is a national down payment assistance program that is funded by the CBC Mortgage Agency (CBCMA), which is a federally chartered government agency.
Chenoa works by offering buyers a 2nd loan to cover their down payment and closing costs.
The 2nd loan has two options: a 10-year repayable loan at a fixed interest rate 2% above the first loan, or a 30-year forgivable loan with no interest.
Chenoa offers up to 5% of the home purchase price to help provide down payment/ closing cost assistance for an FHA loan
Program Criteria
The Chenoa Fund down payment assistance program is available for FHA loans and has less rigid guidelines compared to CalHFA. There are no first-time home buyer requirements, meaning if you currently own a home, or have owned a home in recent years, you are still eligible for this program.
The minimum credit score for this program is 640, similar to CalHFA, and the maximum debt-to-income (DTI) ratio is 50%. The Chenoa down payment assistance program also does not have any income limits, so those who may have higher than average incomes, are still eligible.
GSFA Platinum Program
The GSFA Platinum program offers up to 5.5% of the loan amount to cover the down payment and closing costs in the form of a 15-year 2nd loan at a fixed-rate of 2% above the first mortgage loan
An added benefit to this down payment loan program is that there are options for forgivable gifts with “select” professions
Program Criteria
The GSFA Platinum Program is available for FHA and Conventional loans. There are no first-time home buyer requirements, and the minimum credit score for this program is 640. The maximum debt-to-income (DTI) ratio is 50%, and similarly to the CalHFA program, there are moderate income requirements.
Frequently Asked Questions
What down payment assistance programs are available for healthcare workers in California?
There are three popular down payment assistance programs available in California: CalHFA, Chenoa, and GSFA Platinum. Each program offers different benefits, eligibility requirements, and assistance amounts, so it is worth comparing all three to determine which best fits your financial situation.
What is the CalHFA Equity Builder Loan and how does it work?
The CalHFA Equity Builder Loan is a second loan that gifts first-time homebuyers in California up to 10% of their home’s purchase price, which can amount to $30,000 or more. The funds can be used for the down payment, closing costs, or both, allowing buyers to close with as little as $0 out of pocket. The second loan carries no payments and no interest, and 20% of the balance is forgiven each year until it is fully forgiven after five years.
Who qualifies for the CalHFA program?
CalHFA is available for first-time homebuyers in California, defined as anyone who has not held ownership or title to a home in the past three years. Applicants must have a minimum credit score of 640, a maximum debt-to-income ratio of 45 to 50%, and an annual income below 80% of the area median income. Completion of a homebuyer education counseling course through an eligible organization is also required.
How does the Chenoa Fund differ from CalHFA?
The Chenoa Fund is a national program that offers up to 5% of the home purchase price for down payment and closing cost assistance on FHA loans. Unlike CalHFA, there are no first-time homebuyer requirements and no income limits, making it accessible to a broader range of buyers. Chenoa offers two second loan options: a 10-year repayable loan at a fixed rate 2% above the first loan, or a 30-year forgivable loan with no interest.
What does the GSFA Platinum program offer?
The GSFA Platinum program provides up to 5.5% of the loan amount for down payment and closing costs in the form of a 15-year second loan at a fixed rate 2% above the first mortgage. It is available for both FHA and conventional loans with no first-time homebuyer requirement. An added benefit is that select professions may qualify for forgivable gift options, which can make it a strong fit for healthcare workers specifically.
Are there other down payment assistance programs beyond these three?
Yes. Local governments may offer additional down payment assistance programs specific to certain cities and counties in California. These programs can vary widely in terms of eligibility and benefits, so it is always a good idea to check with a local lender to find out if there are additional programs available in your area that you may qualify for.
Additional Down Payment Assistance Programs:
Local governments may also have additional Down Payment Assistance Programs available for specific cities and counties. Always check with your local lender to see if there are additional, unique programs that you could be eligible for.
