A new California state loan forgiveness program, Forgivable Equity Builder Loan, is attempting to bridge the gap between first-time homebuyers and affordability. This program is geared toward working families or individuals that make enough to pay a mortgage but don’t quite have enough for a down payment.
Qualified first-time homebuyers can borrow up to 10 % of a home's purchase price toward a down payment or closing costs and get the debt forgiven if they occupy the home for five years.
There is a zero percent interest rate on the loan that will be forgiven by 20 percent each year.
To qualify, you have to meet a few requirements; be a first-time homebuyer, make 80% or less than the county's median income, and only spend 45% of that monthly income on expenses.
To break that down a little further, the qualifying income in San Luis Obispo County is around $78,000. If you divide that by 12 and take 45% of that number, you get just about $2,900 which is the monthly expense cap to qualify for the program. Those expenses include anything from loans, car payments, credit card bills, and more.
Rene Martinez, a CalHFA Qualified Loan Officer, tells KSBY that this program probably won't help many people locally in San Luis Obispo County just based on the financial caps.
"You can see where it may not help a lot of people but if there is someone who is under that income level and does not have any expenses, which does happen, they would qualify for a pretty decent mortgage," Martinez said.
To find out more details about this program, you can head toCalHFA'swebsite where they have a link to qualified loan officers that will walk you through the process of applying.