The property market in Los Angeles is not friendly to first-time buyers. According to the California Association of Realtors, only 25% of all LA residents can afford a median-priced house. It’s much more difficult for first-time homebuyers in LA who don’t have a home to sell to meet the down payment.
The good news? Several local, state, and federal programs can support first-time homebuyers in LA. Many of them provide borrowers with assistance with those hefty down payments.
1- Can You Afford Housing In LA?
LA is one of the top costly cities in California after San Jose and San Diego. The average median single-family home in LA values around $765,580. A condo valued at $600,000. The average salary required to finance house payments in these three cities (without additional debt) is $111,533.
i- Are FHA and VA Home Loans the Only Affordable Programs?
Homebuyers are aware of programs like the FHA loans or USDA loans offered by the US government. The VA loans available to US service members and veterans are also quite popular.
However, those aren’t the only choices. The following are six options for buyers in the Los Angeles area.
Buyers must also acquire loans from private lenders to take advantage of these schemes. Thus, credit limits or other financial constraints will certainly apply. However, if homeownership seems just out of reach, it’s worth looking into these choices.
2- California’s First Mortgage Programs
First-Time Homebuyers in LA are eligible for the California Housing Finance Agency’s first-time mortgage program. They should be able to meet the income restrictions in their area. Borrowers in Los Angeles County must earn less than $144,700 to qualify.
Buyers who secure traditional house loans from qualifying private lenders can obtain smaller loans known as CalPlus and MyHome programs. These are generally paired. They can be used to cover closing fees. You can cover 3.5 percent of the purchase price in the form of down payment assistance.
Monthly mortgage payments do not include smaller loans. Buyers pay them down in one lump sum when they sell or refinance their homes. The highest amount these loans can be used to buy a home is $765,000.
i- What Is CalPlus & MyHome?
The California Housing Finance Agency defines a first-time home buyer as someone who has not owned a primary residence in the previous three years.
The CalPLUS Conventional Loan Program is a traditionally insured first mortgage loan with a fully amortizing fixed interest rate. It offers a maximum 30-year term from the California Housing Finance Agency. It requires a 3 percent down payment for this scheme.
For down payment assistance, it is paired with the CalHFA Conventional Zero Interest Program. The Conventional ZIP is a deferred zero-interest second loan that people use in conjunction with a CalPLUS Conventional loan.
3- First Home Mortgage Programs Los Angeles County
With one key exception: the whole city of Los Angeles, it is available to buyers in both incorporated and unincorporated LA County. It frustrates many buyers, but there are plenty of beautiful places to visit outside the city limits.
Participants must earn less than $125,280 to be eligible for the program. Participants work with partner lenders to acquire a home loan that includes a grant to help with the down payment and closing fees. The award, which buyers are not required to repay, can be up to 4% of the overall loan amount.
4- Homeownership Programs Angeles County for First-Time Homebuyers In LA
This program offers financial aid for down payments and closing fees. However, the funds originate from a pool of federal grant cash. That means the number of persons who can engage in the program is limited. Participants in the program must earn less than $66,800 per year to be eligible for loans of up to $75,000. These loans have no interest. The buyer repays them when he sells the house or pays off the mortgage.
The city of Los Angeles is likewise excluded from this program. However, other significant cities such as Culver City, West Hollywood, and Hermosa Beach are included.
5- Homebuyer Assistance City of Los Angeles
For first-time homebuyers in LA, the two programs available are remarkably comparable. One is for buyers earning less than $66,800 per year. The other is for buyers with a modest income of $62,001 to $130,800.
The low-income program provides a loan of up to $90,000 to cover the down payment and closing charges. The low-income loans are only available for single-family homes and condos worth up to $745,750 and $513,000, respectively.
6- Neighborhood LIFT
Neighborhood Housing Services of Los Angeles County has partnered with Wells Fargo and NeighborWorks America. Wells Fargo and NeighborWorks® America’s program provides down payment assistance to qualifying homeowners who complete authorized homebuyer education. The program offers $15,000 to $25,000 to qualified homebuyers for down payment or closing fees on a suitable home.
Regentology Can Help You Secure Your House In LA
Don’t stress over LA’s expensive housing rates. Regentology can help you in all stages from getting home loans to buying. Our team will show you viable options for home loans keeping in mind your needs and budget. Being a first-time homebuyer in LA can be complex. However, our team of professionals will simplify this complexity for you.