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What First-time Homebuyers Need to Know about Finance By Roger Cruzen C.A.R. Magazine F irst-time buyers are full of questions. How does bad credit affect my chances of getting a mortgage? Is there a difference between being pre- qualified and pre-approved? What kind of personal financial information will I need to provide when I apply for a mortgage? How does a lender decide whether or not to approve my loan? But as the shortage of housing inventory drives home prices beyond the reach of more and more Californians, first-time homebuyers are more interested in the answers to a differ- ent set of questions: Are there programs that provide financial assistance to people like me? How do I find out if I qualify? And why hasn’t my agent told me about these programs? Real-time Access to First-time Buyer Programs Top Producers Gilroy Office, 2015 Marta Dinsmore, Realtor Intero Real Estate Services 408.840.7420 DRE #01352339 Sean Dinsmore, Realtor Intero Real Estate Services 408.840.7327 DRE #01966405 Everyone knows the median-priced home is out of reach for many Californians – particularly given the size of down payment required. What the vast majority of buyers (and, sadly, more than a few REALTORS® and lenders) may not know is that the Golden State also is at the top of the list when it comes to programs that provide financial assistance to potential home- buyers who otherwise might not ever be able to come up with a down payment or closing costs or cover other expenses that accompany a home purchase. A recent count reveals that Californians have access to some 420 unique home- buyer assistance programs for low and moderate income individuals and families administered by 240 federal, state and local agencies, according to C.A.R.’s Down Payment Resource Directory, a searchable data base that matches homebuyers with a laundry list of available programs based on a number of variables. (Psst! There are even programs available to previous homeowners, so long as they have not owned a home for the past three years!) GILROY • MORGAN HILL • SAN MARTIN MAY/JUNE 2016 The Down Payment Resource Directory ( is easy to use and the ideal tool for REALTORS® and Millennial first-timers who prefer to do their own research before seeking assistance from a REALTOR® or lender. Users simply answer a series of basic questions (How many people live in your household? Do you currently own a home? What is your annual household income? Are you or a co-borrower a veteran or Native American? Do you or a co-borrower work in education, law enforcement, or as a fire fighter or health care worker? And so on.). As the REALTOR® or client enters this information, instantly compiles a comprehensive list of available programs and includes links to their websites for more information about qualification criteria, loan and income limits, and other requirements–all in real time. Among the best-known and most popular programs agents and clients find during their search of the Down Payment Resource Directory are those available through the California Housing Finance Agency (CalHFA), founded in 1975 to help low and moderate income families with good credit buy homes with a mortgage they can afford. To date, more than $19.5 billion in assistance has been invested in qualified homebuyers. CalHFA’s MyHome Assistance Program, launched last October, offers up to 5 percent in assistance, low interest rates and deferred payments to first- time, employed buyers with good credit. Homebuyers can combine a CalHFA first mortgage with CalHFA’s Mortgage Credit Certificate (MCC) program, which provides a federal tax credit that can lower taxes and increase a buyer’s disposable income. Additionally, the CalPLUS FHA program offers a first mortgage loan insured by FHA and the CalPLUS Conventional program, which offers a first mortgage loan insured through private mortgage insurance. Both loans can be combined with the CalHFA Zero Interest Program (ZIP) for down payment assistance and/ or closing costs. What’s more, CalHFA has special programs for teachers, school administrators and staff that are designed to retain educators in communities with high- priority schools. 21