Affording a home can be a difficult process, that much goes without question.
There are numerous mortgage and grant types out there, each with their own requirements, specifications, advantages and disadvantages.
That is especially true if you are looking at one of the many beautiful homes in San Diego County.
While there are options for loans, assistance programs and grants out there, meeting the requirements can be a difficult thing, as you have to consider income limits, loan limits and other qualifiers when it comes to loans.
Fortunately, if you are a first-time homebuyer, there are options.
The San Diego Housing Commission or SDHC offers options to help low and moderate income families purchase their first homes.
These come in the form of deferred loans, homeownership grants, and mortgage credit certificates, and can be used to buy single family homes, townhomes, condominiums and other properties in the City of San Diego.
In addition, SDHC administers the County of San Diego's First-Time Homebuyer Down Payment and Closing Cost Assistance Program.
This County Department of Housing and Community Development Program serves the cities of Carlsbad, Coronado, Del Mar, Encinitas, Imperial Beach, La Mesa, Lemon Grove, Poway, San Marcos, Santee, Solana Beach, Vista and unincorporated areas of San Diego County.
Since the program began on August 13, 1990, the SDHC has helped over five thousand families and individuals purchase their first home.
With a program like the first-time homebuyer program being offered through the SDHC, you can get up to $70,000 in both down payment and loan assistance.
San Diego, and the State of California, have plenty of home purchasing assistance programs and loans that you can utilize, but this one offers some of the best options a first-time homebuyer can get when it comes to buying a home in San Diego.
You could be one of the people adding to those numbers, if you meet all of the qualifications required for the first-time homebuyer program offered through the SDHC.
If that much is true, you can get help with down payment assistance, closing costs and the loan itself in a major way.
Here's a quick rundown of our list:
- Who is Eligible?
- Extremely Low Income Per Family Size
- For Low Income
- For Moderate Income
- What Does The Assistance Offered Include?
- And The Homeownership Grant Program?
- How About The Mortgage Credit Certificate?
- The County of San Diego
Who is Eligible?
The SDHC’s primary program is limited to those who plan on purchasing a home within the City of San Diego with postal ZIP codes that begin with 921.
You must obviously also be a first-time homebuyer, which is defined as someone who has not owned a home for at least the past 3 years.
A first-time homebuyer is defined as someone who has not owned a home for at least the past 3 years – or has ever owned a home.
SDHC’s primary program is limited to buyers earning no more than 100% AMI, which is currently $73,500 for a family of 4.
These eligible buyers may qualify for a deferred-payment, second trust deed loan of up to 17% of the purchase price, with an interest rate set at 3%.
Eligible families with incomes at or below 80% of AMI, which is currently $68,000 per year for a family of 4, may also apply for a 3% interest, deferred-payment loan of 33% of the purchase price – or, up to $70,000 – to purchase a single-family-home, townhome or condominium in one of the County of San Diego program areas .
There is also the limits on annual household income and area median income to consider, as well as the purchase price of the home.
Extremely low income can vary, despite the San Diego Median from the U.S. Department of Housing and Urban Development.
Based on HUD Formula Income limits and adjusts for high housing cost areas, here are the numbers:
Extremely Low Income Per Family Size:
One family member at 30% income is $17,850 in annual income, $20,800 at 35% income, $23,800 at 40% income, and $29,750 at 50%, which is considered very low income.
Two family members at 30% income is $20,400, $23,800 at 35% income, $27,200 at 40% income, and $34,000 at 50% income.
Three family members at 30% income is $22,950, $26,750 at 35% income, $30,600 at 40% income, and $38,250 at 50% of income.
Four family members at 30% income is $25,500 income, $29,750 at 35% income, $34,000 at 40% income, and $42,500 at 50% income.
For Low Income:
For one family member at 60% income it is $35,700, $38,700 at 65% income, $41,650 at 70% income, and $47,600 at 80% income.
Two family members at 60% income equals $40,800, $44,200 at 65% income, $47,600 at 70% income, and $54,400 at 80% income.
Three family members at 60% income at $45,900, $49,750 at 65% income, $53,550 at 70% income, and $61,200 at 80% income.
For four family members at low income, 60% income means $51,000, $55,250 at 65% income, $59,500 at 70% income, and $68,000 at 80% income.
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For Moderate Income:
For one family member with moderate income at 90% income the amount is $46,300, $51,450 at 100% income, $56,600 at 110% income, and $61,750 at 120% income.
Two family members at 90% income would be $52,900, $58,800 at 100% income, $64,700 at 110% income, and $70,550 at 120% income.
Three family members at 90% income would be $59,550, $66,150 at 100% income, $72,750 at 110% income, and $79,400 at 120% income.
Four family members at 90% income is $66,150, $73,500 at 100% income, $80,850 at 110% income, and $88,200 at 120% income.
You can see how the income caps and qualifiers are spread out in charts available online, but hopefully going through extremely low to moderate income for a family of up to four people has given you a better idea of how the SDHC measures income.
What Does The Assistance Offered Include?
The SDHC first-time homebuyer program offers a 3% interest, deferred-payment loan.
Eligible buyers that earn no more than 80% AMI (area median income), which is currently $64,800 per year for a family of four, can possibly qualify for a deferred-payment, second trust deed loan of up to 17% of the purchase price, with the interest rate set at 3%, as mentioned above.
No payments will be required for 30 years, unless the owner sells or chooses to no longer occupy the home as their primary residence.
Should this happen, the principal balance, including the accrued interest, must be repaid.
To qualify, buyers must obtain a fixed-rate first trust deed loan, have adequate income, a good credit rating and provide a minimum down payment of 3%, as well as attend a homebuyer education class.
And The Homeownership Grant Program?
To qualify for the Homeownership Grant Program, buyers that earn no more than 80% of AMI, again which is currently set at $64,800 per year for a family of four, can qualify for a down payment closing cost assistance of up to 6 percent of the purchase price, which is not to exceed twenty-thousand dollars, as noted above.
Again, you can use the charts above to get an idea of how the SDHC measures out income qualifiers for low to moderate income families and individuals, and how they use these numbers to determine your eligibility.
(Please note: Homeownership Grant funds for the down payment and closing cost assistance will be non-recoverable and forgiven at escrow closing.)
How About The Mortgage Credit Certificate?
This one ups the acceptable AMI a bit.
Qualified buyers cannot exceed 140% of the AMI with their income, which is currently $101,800 a year for a family of four.
Should this requirement be met, buyers can claim a federal income tax credit.
Buyers earning 80% of their AMI, which, again, is currently set at $64,800 per year for a family of four, or less, or are buying in a specific neighborhood may claim a tax credit of 20% of the annual interest paid on their mortgage.
(Please note: all other buyers would receive a tax credit of 15%.)
Buyers may have to repay the tax if they sell the home within the first 9 years, but for many buyers the reduced tax burden can be significantly helpful.
The County of San Diego
Eligible families with incomes at or below 80% of AMI, which you can note listed several times above, can apply for a 3%, deferred-payment loan of 33% of the purchase price; at least up to $70,000.
They can use this deferred-payment loan to purchase a single-family home, townhome or condominium in one of the County of San Diego program areas.
These Include: Carlsbad, Coronado, Del Mar, Encinitas, Imperial Beach, La Mesa, Lemon Grove, Poway, San Marcos, Santee, Solana Beach, and Vista.
The unincorporated areas included are a lot longer, so bear with and check to make sure the area you’re eyeing is covered: Alpine, Aqua Caliente, Bankhead Springs, Banner, Barrett Junction, Bear Valley, Blossom Valley, Bonita, Bonsall, Borrego Springs, Bostonia, Boulder Oaks, Boulevard, Buckman Springs, Cameron Corners, Camp, Canyon City, Casa De Oro, Cottonwood, Crest, Cuyamaca, De Luz, Dehesa, Del Dios, Descanso, Desert Lodge, Dulzura, Eagles Nest, Echo Dell, Eden Gardens, Enginerer Springs, Eucalyptus Hills, Fairbanks Ranch, Fallbrook, Flinn Springs, Foster, Glen Oaks, Green Valley Falls, and the list goes on for quite some time.
You can check the SDHC site here for a comprehensive checklist.
If you want to apply for assistance under the County of San Diego program, it must be done through an SDHC-approved lender.
As a mortgage broker I am more than happy to answer any questions you might have, so do not hesitate to ask.
A home in San Diego can cost a pretty penny, but that doesn’t mean it should be beyond your grasp.
If you are a first-time homebuyer, you should definitely consider taking advantage of the assistance the SDHC offers.
There are plenty of options out there for great mortgage terms, grants, help from the government, and many of these can help get you the San Diego home of your dreams.
San Diego, and the State of California, have plenty of home purchasing assistance programs and loans that you can utilize.
Each and every single one of them has their own benefits, drawbacks, pros and cons – and exploring them is what a large part of this blog is dedicated to.
Every program that is either offered through San Diego, the State of California, through the government or even a private lender can all offer something to help you get the home of your dreams.
Understanding and utilizing these grants, loans and programs are one of the best ways you can get into a new home, either as a first-time homebuyer or as someone who is simply looking for a new domicile.
Whether it is down payment assistance, assistance with closing costs, assistance with loans, low interest rates or any other kind of assistance when it concerns your mortgage, there are plenty of options available for you to take advantage of, and I highly recommend reading my other articles on them.
- CalHFA Zero Interest Program (ZIP)
- Conventional 1% Down Payment
- FHA Loans
- The Help Grant
- The Sapphire Grant
- The MCC Tax Credit Program
This blog is loaded with information on all your options, and is updated regularly to make sure you are informed, educated and can find the best way to afford the home of your dreams.
Homes, townhomes, condominiums and any property can cost an arm and a leg in San Diego.
House prices are on the rise as well, though we are fortunate that mortgage rates have remained fairly stable throughout 2016 – which you can see by looking at the monthly mortgage forecast which is also provided on my blog.
What do you think?
Leave a message in the comments section below - or call or text me at (760) 297-4539
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