California voters approved Proposition 37, a $25 billion assistance program designed to help buyers purchase new construction homes with as little as 3% down payment.
Eligibility & Rules:
• Property type – Must be a newly constructed home (resale properties do not qualify).
• Buyer status – Open to both first-time and repeat home buyers.
• Repayment requirement – This is not a grant or free money. The secondary financing is a loan that must be repaid over time.
How It Works:
The program bridges the gap between your 3% down payment and the full purchase price by layering 2 separate loans:
1. Primary loan: You obtain a standard 80% first mortgage.
2. CalHFA second loan: The California Housing Finance Agency provides a fixed-rate secondary mortgage covering the remaining 17%.
Example: A home with $800,000 purchase price
• Buyer Down Payment (3%): $24,000 is the required out-of-pocket contribution
• Primary Mortgage (80%): $640,000 is the standard first loan
• CalHFA Second Mortgage (17%): $136,000 is the fixed-rate second loan
Total of $800,000 (100%) from 2 separate monthly payments
Note: Because this program relies on two separate loans, buyers must qualify for both and will have two monthly mortgage payments.
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Shirin Rezania Ramos | 858.345.0685 | www.shirinramos.com | Compass, DRE 02033796
