Homeownership loan that allows first-time buyers to borrow up to 10% of the purchase price and obtain debt forgiveness if the buyer lives in the house for 5 years.
The Reimbursable Equity Construction Loan allows qualified first-time buyers to borrow loans, get debt forgiveness, and is available to middle-income families earning less than 80% of their county’s median annual income. California lawmakers earmarked $100 million in the state budget for first-time homeowner loans, aimed at helping working families with enough income to pay a mortgage but not enough savings to offset a deposit.
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 homeownership. The generational wealth gap has been particularly wide in Black, Hispanic, and some immigrant communities in the state, and the program aims to help these communities become lifelong homeowners. “The down payment and closing costs are a real bump,” he said. These efforts come as the cost of living in the state of California has increased significantly in recent yearsespecially for Northern California – the median Bay Area home price 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 loan size. More information is available with the preferred loan officers listed on CalHFA website.