California Will Help First-Time Buyers With Down Payment (Sacramento: insurance, credit)

[1200RT]

If only.... there was already a government program already in place to help first time buyers put down like... 3%?

[Igor Blevin]

Originally Posted by 1200RT

If only.... there was already a government program already in place to help first time buyers put down like... 3%?

Not that I support the proposed program, but I just want to note that at 7% or 8% interest for a 30-year fixed mortgage, the monthly payment is much higher when financing 97% of the home's value, vs. 80% of the home's value.

Many people who would qualify for this program likely would not have top credit scores, meaning their interest rates would be somewhat higher than the best rates available to those with top credit scores. That makes a difference when you are struggling to service the mortgage on your first home and can barely afford it paying 97% loan-to-value.

[Chimérique]

Originally Posted by Finper

I thought Ca was billions in the red? If Ca is known for anything it’s that people hold on to their homes forever. What if you never sell your home?

I thought the same thing....what happens if you never sell your home....or you give it to a relative...or you wait 30 years before you sell the home?

[JGC97]

Good question. Since there's already a program for first time home buyers, why this one? Looking deeper into the original article, this pops up. A little more detailed but there's a chart (also attached) that shows income limits. Are these considered low income loans?


https://www.calhfa.ca.gov/dream/index.htm

https://www.calhfa.ca.gov/homeowners...ome/income.pdf

[Finper]

Originally Posted by Chimérique

I thought the same thing....what happens if you never sell your home....or you give it to a relative...or you wait 30 years before you sell the home?

There’s so many “what ifs” it doesn’t seem smart economically for California to do but that’s never stopped Sacramento politicians before

[Chimérique]

Originally Posted by Finper

There’s so many “what ifs” it doesn’t seem smart economically for California to do but that’s never stopped Sacramento politicians before

Lol,
Please note these are primarily "Los Angeles, and Bay Area" politicians; they hold the power, votes, and money, Sacramento is just WHERE they do their "dirty" work.

[JGC97]

Originally Posted by Chimérique

I thought the same thing....what happens if you never sell your home....or you give it to a relative...or you wait 30 years before you sell the home?

Originally Posted by Finper

I thought Ca was billions in the red? If Ca is known for anything it’s that people hold on to their homes forever. What if you never sell your home?

I found the answer in one of the other links.

Upon sale or transfer of the home, the homebuyer repays the original down payment loan, plus a share of the appreciation in the value of the home.

https://www.calhfa.ca.gov/dream/index.htm

[CA4Now]

Originally Posted by Finper

If Ca is known for anything it’s that people hold on to their homes forever.

Average length of time homeowners in California stay in their homes is around 13 years, and has increased since 2020.

[CA4Now]

Originally Posted by HereOnMars

Since there's already a program for first time home buyers, why this one? Looking deeper into the original article, this pops up. A little more detailed but there's a chart (also attached) that shows income limits. Are these considered low income loans?

https://www.calhfa.ca.gov/dream/index.htm

https://www.calhfa.ca.gov/homeowners...ome/income.pdf

I think that that's the one I read about a few weeks ago, which seems like a much better plan for first time home buyers. But they're available only to those under a certain income.

[1AngryTaxPayer]

Smells too much like this. The tax payers are going to get a bloodbath...again. So it sounds good at first until they can't make the payments so they squat as long as possible (free rent) then give it back to the banks. We've seen this movie before.


https://www.federalreserve.gov/consu.../cra_about.htm