Home buyer for the first time? California grants a 0% down payment loan.

Low-income Californians looking to buy a home have a new tool at their disposal: an interest-free loan to use as an advance that, if certain criteria are met, does not need to be repaid.

The California Housing Finance Agency began offering this help last month through the Forgivable Equity Builder Loan assistance program. The Times outlined the program in March as part of a series on How to buy a home in Southern California.

Here are a few more details on what’s on offer, as the state tries to make it easier for new buyers in a brutal real estate market.

Am I entitled to a loan?

To qualify, you must be a first-time home buyer and have a household income of no more than 80% of the median income in your area, which is generally referred to as low-income. In Los Angeles County, this means you need a family income of $ 68,880 or less.

If you meet these criteria, you can get up to 10% of the purchase price of your home to use as a down payment.

Previously, low-income families could receive up to 3.5% of the purchase price of their home through a different state program. That money was not only less, it also had to be repaid with interest.

Will I have to repay the loan?

The Forgivable Equity Builder Loan has an interest rate of 0% and is completely forgiven if you stay in your new home for five years.

How can I apply for this program?

Eligible Californians can apply for assistance through state-approved private lenders. A list is available here.

Why does the state do it?

Rising home prices, supercharged during the pandemic as people searched for more living space, made home buying even more out of reach for many Californians, especially first-time buyers. The state is looking for new ways to help.

“Home equity has proven to be one of the strongest ways for families to build and transmit intergenerational wealth and CalHFA is committed to improving equal access to home ownership for all Californians,” said Tiena Johnson Hall, Director CalHFA executive in a statement when the program was announced

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