Zero-Down Home Loans: More Buyers May Qualify Than You Think

I do not mention zero-down home financing nearly enough. Many buyers can afford the monthly mortgage payment, but they struggle to save enough money for the down payment and closing costs. The good news is that several loan programs may allow a qualified buyer to purchase a home with no down payment from their own funds.
Some of these programs can also be used with high-balance loan amounts, making them much more practical in Southern California than many people realize.
Here are the main programs agents should know about. 

Chenoa Down-Payment Assistance – 600 min Credit Score
The Chenoa program can be paired with an FHA first mortgage to help cover the normal 3.5% FHA down payment.
The buyer receives:

• An FHA first mortgage for 96.5% of the purchase price
• A second mortgage that provides the remaining 3.5%
• Up to 100% combined financing

Depending on the option selected, the second mortgage may be forgivable or repayable. One of the biggest advantages of Chenoa is that the borrower does not have to be a first-time homebuyer. Certain Chenoa options do not have any income restrictions. The borrower must still qualify under FHA guidelines, occupy the property as a primary residence and complete any required homebuyer education. 

CalHFA Programs – 660 Min credit score
CalHFA offers several programs designed to help California homebuyers with their down payment and closing costs.
The most commonly used option is the MyHome Assistance Program.
When paired with a CalHFA FHA mortgage, MyHome may provide up to 3.5% of the purchase price or appraised value toward the buyer's down payment.
The assistance is generally structured as a deferred-payment second mortgage. This means the buyer normally does not make a monthly payment on the assistance loan. It is typically repaid when the home is sold, refinanced, transferred or the first mortgage is paid off.
CalHFA programs may also be available with conventional financing and high-balance loan amounts, depending on the buyer, property and county loan limit.
CalHFA does have income limits, but those limits can be higher than many buyers and agents expect. It is always worth checking before assuming a buyer earns too much to qualify. 

VA Loans – We all know about these – 0 down best loan on the market!   

USDA Loans –
USDA financing can provide 100% financing for eligible buyers purchasing in approved rural or suburban areas.
USDA loans may offer:

• No down payment
• Competitive fixed interest rates
• Lower monthly mortgage insurance than FHA
• Flexible credit guidelines

USDA loans do have household-income limits and property-location requirements. However, eligible areas are not always as rural as buyers expect. Some communities outside the more densely populated parts of Southern California may qualify. 

California Dream For All
The California Dream For All program can provide significant assistance to qualifying first-time and first-generation homebuyers.
The program may provide up to 20% of the purchase price, subject to a maximum assistance amount and available funding.
This can greatly reduce the buyer’s first mortgage and may eliminate the need for monthly mortgage insurance.
However, Dream For All is a shared-appreciation program. When the buyer sells or transfers the home, they must repay the original assistance along with a percentage of the home’s appreciation.
The program also has income limits, eligibility requirements, and limited application periods. It is a great opportunity when available, but it is not an everyday loan program, and you have to win the lottery to get in!  

What About Other Assistance Programs?
There are also city, county, nonprofit and employer-based assistance programs.
Some provide grants, forgivable loans or deferred-payment second mortgages. Unfortunately, many of these programs have income limits that are difficult to meet in Southern California.
A buyer may earn too much to qualify for the assistance but still struggle to save enough for the down payment.
These are like finding a needle in a haystack!   

Before telling a buyer to wait another year or two, let us review their situation. The right loan program could turn a future buyer into a homeowner today. All programs are subject to current guidelines, credit approval, income limits, occupancy requirements, property eligibility and funding availability. Each buyer should receive a personalized loan comparison before entering into a purchase agreement. 

Interest Rates
Interest rates improved Friday, Monday and so far today. Unfortunately, we had to hit our worst levels in over 6 months before we jumped into this 3-day winning streak. I now know what it feels like to be an Angels fan. Last place and you win 3 straight, and you are still in last place!  

Loan Programs Snapshot

• Government loans (FHA/VA/USDA): in the 5s –
• Conventional (≤ $832,750): low 6s
• High-balance: mid to high 6s
• Jumbo: Mid 6s
• Bridge Loans  7.75-7.99

Additional options:

• Bank statement loans (10% down+)
• P&L loans (20% down, no bank statements)
• 0% down options (620+ score)
• DSCR loans (15% down)
• Buydowns Available (3/2/1, 2/1, 1/0)
• Private Money loans – Hard Money  
• Construction Loans
• 203K loans
• Commercial Loans
• Fix and Flip Loans  

Rates subject to change without notice. 

Condo Update

Good news:

• Nothing this week!     

Bad news:

• Nothing this week!

We love your Non-Warrantable Condo loans!!
Need help checking a condo? Call me, and we can look it up in real time.
Also:
Full California "naughty list" available here:
https://mikemeena.com/non-warrantable-condos/
Let's Connect
If you or your clients, friends, or family need guidance, I'm here.

📞 661-291-2222 (Direct)

📞 661-714-6258 (Cell)

📞 661-260-2970 ext. 2222 (Office)

📧 Mike@AugustaFinancial.com
Sincerely