California Launches Program Allowing First-Time Homebuyers to Borrow Down Payment at 0% Interest

California state officials have launched a new program aimed at helping first-time homebuyers overcome the challenges of purchasing a home in the state’s competitive housing market. The Forgivable Equity Builder Loan program offers forgivable loans to homebuyers for up to 10% of the home’s purchase price, with a 0% interest rate.

Governor Gavin Newsom emphasized the importance of addressing the housing affordability crisis by utilizing innovative solutions like this program. The goal is to provide first-time homebuyers with immediate equity, ultimately helping Californians build and pass on intergenerational wealth.

With California’s median home prices reaching new highs and interest rates on the rise, only 24% of households could afford the median-priced home in the first quarter of 2022. This program aims to make homeownership more accessible to Californians whose income is less than 80% of the Area Median Income in the county where the property is located.

To qualify for the Forgivable Equity Builder Loan, applicants must be first-time homebuyers, use the property as their primary residence, complete homebuyer education counseling, and meet income eligibility requirements based on their location. The loan can be used for down payment or closing costs on a single-family, one-unit residence.

Interested families can apply for the program by contacting a Preferred Loan Officer in their area and providing necessary documentation such as pay stubs, bank statements, employment history, and previous tax returns. This initiative aims to make the dream of homeownership a reality for more Californians and provide a pathway to financial stability and wealth-building opportunities.