The California Forgivable Equity Builder Loan is for qualified buyers who need a little extra cash to purchase their home. It is aimed at low-income individuals and families, with an AMI requirement of <80%. Here are some of the qualifying factors:
California Forgivable Equity Builder Loan Overview
- The borrower has access to 10% of the sale price or appraised value (whichever is less) as deposit aids
- The 10% down payment assistance funds can be waived if the borrower lives in the house for 5 years
- Must have an income equal to or less than 80% of the Area Median Income (AMI)
- Cannot be combined with CalHFA MyHome or ZIP products
- Other qualifying factors such as DTI, credit score, etc. will be announced.
- The program has been launched since April 4, 2022.
California Launched A New Forgivable Deposit Program.
“The Forgivable Equity Builder Loan gives first-time homebuyers a head start on this with immediate value in their home through a loan of up to 10% of the home’s purchase price. The loan can be waived if the borrower occupies the home as their primary residence for an uninterrupted period of five years. The Forgivable Equity Builder Loan is a forgivable subordinated loan program that can only be used with a first CalHFA mortgage.” (California Housing Finance Agency website).
House prices are high and it seems impossible to buy a house. Forgivable Equity Builder Loan comes with an interest rate of 0 percent and if the borrower stays in the house for more than 5 years, he does not have to pay the junior loan. The CalHFA program is designed for first-time homebuyers in California buying a home to live in.
There are income requirements that you must meet, depending on the province in which you buy the property.
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