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    Down Payment Help for First-Time Homebuyers

    By Assemblymember Phil Ting–

    Home ownership plays a key role in strengthening communities. It also helps families, particularly families of color, build and pass on intergenerational wealth. But one of the challenges of buying a home in California is coming up with a down payment.

    As Assembly Budget Chair, I’m proud of our new effort to break the cycle of renting and instead boost home ownership. With $100 million in funding, the state just launched the Forgivable Equity Builder Loan program for first-time home buyers. It lets qualified, income-eligible Californians borrow up to 10 percent of the home’s purchase price interest-free. That’s right. Zero interest. Plus, if the resident lives in that home for at least five years, the loan is forgiven, helping the owner develop equity much faster.

    I’m excited about this latest path to home ownership because the assistance targets working families who make enough money to pay a monthly mortgage, but lack the savings for a down payment. According to a recent California Forward report, of our state’s 555,858 home sales in 2021, more than 35 percent were purchased by first-time homebuyers.

    I see an opportunity to grow those numbers under our new forgivable loan program. Owning a home provides stability, economic security, and a sense of belonging. Plus, homeowners tend to be more engaged on issues affecting their neighborhood and city.

    To qualify, applicants must earn less than 80 percent of their county’s median income. In San Francisco, that limit is $106,880. For all Bay Area counties, the cap is below $120,000. The property can be a townhouse, single-family house, condos, or manufactured homes in California, and must be a primary residence.

    On top of that, people must go through homebuyer education counseling and obtain a certificate of completion through an authorized organization. Then, they must be approved for a mortgage. It’s best to work through loan officers who is familiar with the Forgivable Equity Builder Loan program. Documents to have ready:

    • Pay stubs
    • Bank statements
    • Employment history
    • Tax returns

    More information, including a list of approved lenders, can be found on the California Housing Finance Agency’s website:

    I know it’s tough to break into the home buying market with housing prices and mortgage rates increasing. My colleagues and I in the Assembly know we must do more to boost home ownership rates. We’ve made progress on housing production and affordability over the years. But there are still gaps and barriers that current plans and programs do not address.

    More Californians deserve a chance to make their dream of home ownership a reality. We’re committed to creating more opportunities to take that first step.

    Phil Ting represents the 19th Assembly District, which includes the Westside of San Francisco along with the communities of Broadmoor, Colma, and Daly City.

    Published on May 19, 2022