You are standing at the edge of a river, looking at a house on the other side. You can see it clearly: the porch light, the small yard, the window where a desk would go. Your savings account is the bank you are standing on, and the down payment is the water between. Every month you save, the price on the other side seems to move a little further away.
CalHFA down payment assistance is one of the bridges California built for this exact spot. It can cover part of your down payment or closing costs with a loan you do not repay until you sell, refinance or pay off the home. It is not free money, and it is not simple. But for many first time buyers, it is the difference between watching the house and walking into it.
What CalHFA is
What it means: CalHFA is the California Housing Finance Agency, a state agency that helps low and moderate income Californians buy homes. It does not lend to you directly. You work with a CalHFA approved lender, and that lender makes the loan using CalHFA programs.
There are two pieces to understand. The first mortgage is your main home loan. The assistance is a second, smaller loan that sits behind it and helps you get in the door.
| Term | What it means in plain words |
|---|---|
| First mortgage | Your main home loan, paid monthly |
| Down payment assistance | Help with your down payment or closing costs |
| Deferred loan | A loan with no monthly payments, repaid later |
| Junior loan or silent second | A second loan behind your first mortgage, often with no monthly payment |
| Shared appreciation | Repaying a loan plus a share of how much the home's value grew |
| Income limit | The highest household income allowed in your county |
The main CalHFA programs
CalHFA's lineup changes, and funding for some programs opens and closes. Here are the pieces most first time buyers hear about. Check current figures at calhfa.ca.gov before you plan around any of them.
| Program | What it does | How it is repaid |
|---|---|---|
| MyHome Assistance | Up to 3.5 percent of the price with a CalHFA FHA loan, or 3 percent with a CalHFA conventional loan | Deferred, repaid when you sell, refinance or pay off the first mortgage |
| ZIP, the Zero Interest Program | Help with closing costs, usually a percentage of the first loan, paired with CalPLUS first mortgages | Deferred, zero interest, repaid at sale, refinance or payoff |
| CalPLUS first mortgages | FHA or conventional first loans with a slightly higher rate, built to pair with ZIP | Normal monthly payments |
| Dream For All | Up to 20 percent of the price for first generation buyers, with a dollar cap | Repay the loan plus a share of appreciation |
Note: Dream For All has opened in limited rounds with a lottery, and recent rounds filled fast. It cannot be combined with MyHome on the same loan. Watch calhfa.ca.gov for whether a new round is open.
Who qualifies
The rules vary by program, but most CalHFA assistance asks for the same basics.
- You are a first time buyer, which generally means you have not owned and lived in a home in the past three years
- Your household income is under the CalHFA limit for your county, which is updated every year
- The home will be your main residence
- You use a CalHFA approved lender and a CalHFA first mortgage
- You meet a minimum credit score set by the program and the first mortgage, often in the 640 to 680 range
- At least one first time buyer finishes homebuyer education before closing
What it means: homebuyer education is a course that walks you through budgeting, the loan process and owning a home. CalHFA accepts the eHome online course, an eight hour class that costs about $100, or live counseling through an approved housing counseling agency. Check current figures for the fee and accepted providers.
Dream For All goes further. At least one buyer must be first generation, which generally means your parents do not currently own a home, and you have not owned one in the past seven years.
Tip: Income limits are higher than many people expect in high cost counties. Do not rule yourself out by guessing. Look up the current table for your county on calhfa.ca.gov.
The worked example: a $450,000 home with MyHome
Let us use one home all the way through: $450,000 in Sacramento County, a CalHFA FHA first mortgage at an example rate of 6.5 percent, and MyHome Assistance.
- Price: $450,000.
- FHA minimum down payment at 3.5 percent: $15,750.
- MyHome at up to 3.5 percent of the price: $450,000 times 0.035 equals $15,750.
- MyHome can cover the entire minimum down payment.
- Closing costs at about 3 percent: $13,500, which MyHome no longer has room to cover in this example.
| Cash needed to close | Without help | With MyHome |
|---|---|---|
| Down payment | $15,750 | $0 |
| Closing costs | $13,500 | $13,500 |
| Total cash from you | $29,250 | $13,500 |
::: numbers MyHome loan | $15,750 Cash saved at closing | $15,750 Monthly payment on MyHome | $0 :::
You still need cash for closing costs, unless the seller pays some of them, or unless your lender confirms that ZIP or a local program can also apply. CalHFA allows only certain pairings at any given time, so ask a CalHFA approved lender which combinations work today.
::: chart bar Cash you bring to close on a $450,000 home [$] No assistance | 29250 MyHome only | 13500 :::
What you owe later
Deferred does not mean forgiven. When you sell the home, refinance it, or pay off the first mortgage, the MyHome balance comes due, along with any interest CalHFA charges. CalHFA sets the rate, and it can change, so check current figures. The table shows how much interest could build on $15,750 over 10 years at a few example simple interest rates.
What it means: simple interest is charged only on the original amount, not on interest that already built up.
| Example simple rate | Interest per year | Owed after 10 years |
|---|---|---|
| 0 percent | $0 | $15,750 |
| 1 percent | $158 | $17,325 |
| 3 percent | $473 | $20,475 |
If your home rises in value over those years, you usually repay the balance from the sale and keep the rest.
Dream For All works differently. Say you used it for 20 percent of the same home, $90,000, and later sell for $550,000. The home grew in value by $100,000. You repay the $90,000 plus a share of that growth, which has been 20 percent for most buyers and less for lower income buyers.
::: chart bar Dream For All repayment at sale, example [$] Original loan | 90000 Share of appreciation | 20000 Total repaid | 110000 :::
Repayment has a cap, and the terms can change between rounds. Check current figures before you count on this math.
The trade offs to weigh
Assistance makes buying possible sooner. It also has costs that are easy to miss when you are excited.
| Strength | Weakness |
|---|---|
| Buy years sooner with less saved | A second loan sits on the home |
| No monthly payment on the assistance | Balance, interest or appreciation share is due later |
| Fixed rate first mortgages | CalPLUS loans carry a slightly higher rate |
| State backed, with clear rules | Fewer lenders, more paperwork, and income limits |
| Pairs with FHA for thinner credit | FHA mortgage insurance still applies |
Watch out: Refinancing later triggers repayment of most CalHFA assistance. If rates drop and you want to refinance, plan for paying off the second loan at the same time.
Common mistakes
| Mistake | Why it hurts | Do this instead |
|---|---|---|
| Assuming your income is too high | You skip help you qualify for | Check the current county limit on calhfa.ca.gov |
| Working with a lender that does not offer CalHFA | They cannot use the program at all | Choose from CalHFA's list of approved lenders |
| Starting homebuyer education too late | You cannot close without the certificate | Finish the course before you make an offer |
| Thinking deferred means forgiven | The balance arrives when you sell or refinance | Plan for repayment in your long term math |
| Forgetting closing costs | Assistance may only cover the down payment | Save for closing costs or negotiate seller credits |
| Waiting for Dream For All alone | Rounds are limited and fill fast | Prepare for MyHome as your backup bridge |
Your next steps
- Look up the current CalHFA income limit for your county and compare it to your household income.
- Pull your credit reports and check your score against CalHFA and FHA minimums.
- Enroll in an accepted homebuyer education course and save the certificate.
- Find two or three CalHFA approved lenders and ask which programs and pairings are open now.
- Ask each lender for a loan estimate with and without MyHome so you can compare total cost.
- Sign up for CalHFA updates so you hear when a new Dream For All round opens.
The river does not get narrower by staring at it.
Some bridges are built by the state, plank by plank.
Learn where they stand, and cross.