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First Time Home Buyer Programs in San Diego [2022] | 🏠 GUIDE to San Diego County Grants, Loans & Down Payment Assistance

First time home buyers in San Diego face a number of challenges to buy a home. Home prices have climbed 17% year-over-year to $825,000. In this highly competitive market, homes sell in a median of 8 days with the average home selling 4% over list price but hot homes going for more than 10% over listing. The competition is fierce, but simply saving for a down payment can be a huge burden.

The average down payment on a house in San Diego County is $85,714. Only two cities in the country rank higher: San Francisco and San Jose.

The good news? There are several first time home buyer programs in San Diego offering down payment and closing cost assistance. These programs can increase your purchasing power and allow you to put 20% down to avoid private mortgage insurance (PMI), so you can finally start to build equity for yourself.

Here are the best San Diego County grants and loans you may qualify for.

First Time Home Buyer Programs – San Diego County Grants & Down Payment Assistance Loans

As a first time homebuyer, San Diego County offers a variety of programs that can make buying a home more affordable. The following California first time homebuyer down payment assistance programs offer forgivable grants and silent second mortgages to use toward closing costs and your down payment.

San Diego County Closing Cost & Down Payment Assistance Loan | SDHC

The San Diego Housing Commission offers one of the best California first time home buyer programs. You can receive up to 17% of the purchase price in down payment assistance PLUS up to 4% in closing costs. This program is available when you buy a house in San Diego County in unincorporated areas or the cities of: Carlsbad, Coronado, Del Mar, Encinitas, Imperial Beach, La Mesa, Lemon Grove, Poway, San Marcos, Santee, Solana Beach, or Vista.

Note that this program is not offered in the City of San Diego which has separate eligibility requirements and terms.

The program has several requirements you must meet:

  • You are a first time home buyer
  • You have a down payment of at least 3%
  • Your household income does not exceed 80% of the San Diego Area Median Income
  • You will complete a Homebuyer Education course
  • The home will be your primary residence
  • The purchase price does not exceed $522,250 for an attached home or $661,200 for a detached home

The program provides California down payment assistance in the form of a 30-year deferred payment loan with a 3% interest rate. No payments are made until the home is sold, transferred, refinanced, or no longer your primary residence.

MyHome California Down Payment Assistance Deferred Loans | CalHFA

The MyHome Assistance Program through the California Housing Finance Agency (CalHFA) is one of the largest down payment assistance programs in California. First time home buyers can receive up to 3.5% (FHA loans) or 3% (conventional loans) to help with closing costs and the down payment. The assistance is in the form of a 30-year deferred payment loan. No repayment is owed until the home is sold or refinanced.

To qualify, you must be buying the home for use as a primary residence, be a first time home buyer, complete home buyer education counseling, and meet CalHFA income limits.

San Diego Black Homebuyers Program | LISC

The San Diego Black Homebuyers Program is funded by the San Diego Foundation via the San Diego Local Initiatives Support Corporation (LISC). The program offers closing cost and down payment assistance in San Diego County of up to $40,000.

The San Diego County grants are available to first-time buyers who are Black or African-American and buying a primary home in San Diego County. To be eligible, your household income must be lower than 120% of the San Diego Area median income.

San Diego County, California First Time Home Buyer Loans

Your down payment and closing costs are only part of the equation: you can also qualify for a first mortgage designed for first time home buyers in San Diego. These first time buyer loans are designed with looser underwriting, lower down payment requirements, or built-in down payment and closing cost assistance for affordable monthly payments.

First Time Home Buyer Loans | California Housing Finance Agency (CalHFA)

One of the best California first time home buyer programs for a first mortgage is the first time buyer loans from CalFHA. Along with standard conventional and government loans, first time buyers can qualify for loans that can be combined with down payment and closing cost assistance.

  • CalHFA USDA program is a USDA mortgage for homes in designated rural or suburban areas. It can be combined with the MyHome Assistance Program for up to 3% in closing cost and down payment assistance.
  • CalPLUS FHA loan program can be combined with the CalHFA Zero Interest Program (ZIP) to provide assistance with closing costs.
  • CalPLUS conventional loan can be combined with the ZIP program for closing cost assistance.

California First Time Home Buyer Loans for Veterans | CalVet

California is one of the few states to offer a veteran mortgage program separate from the federal VA home loan. While not specifically designed for first time buyers in California, it’s a popular option, especially for San Diego first time home buyers.

There are many differences between CalVet vs VA loans:

  • CalVet home loans have broader eligibility and are available to all California veterans and active duty military except those with punitive or less-than-honorable discharge.
  • CalVet mortgages use contracts of sale or land contracts. The CalVet program maintains legal title to the home and the veteran has equitable title. With a VA loan, the veteran receives full legal title and ownership.
  • Insurance is much cheaper with a CalVet mortgage due to group rates on homeowners insurance, fire and hazard insurance, and disaster indemnity coverage.
  • The CalVet loan limit is $521,250 regardless of location while the VA loan limit is higher for San Diego County.

There are two options for a CalVet loan: the standard home loan which uses your VA entitlement and the CalVet97 option that does not use VA entitlement.

City-Specific First Time Home Buyer Programs in San Diego County

The San Diego Housing Commission first time home buyer programs in San Diego are county-wide, but only available if you are purchasing a home in an unincorporated area or one of several cities. Some cities offer their own first time home buyer programs and may or may not participate in the SDHC program. If you are buying a home in the City of San Diego limits, you will need to use one of the below programs for the city.

City of San Diego Down Payment Assistance Deferred Loan | San Diego Housing Commission (SDHC)

Buying a home in San Diego is expensive – but there are three San Diego first time home buyer programs that can help. The most popular option is the deferred payment loan program. You can receive up to 22% of the purchase price of the home as a silent second mortgage with a fixed 3% interest rate.

You do not need to make payments on the 30-year loan unless you sell the home or no longer occupy it as your primary residence. At that point, the full loan amount and accrued interest will be due.

To qualify, you must buy a home in San Diego city limits, have a down payment of at least 3%, and complete a Home Buyer Education course.

City of San Diego First Time Home Buyer Grant | SDHC

One of the best San Diego first time home buyer assistance programs, the home buyer grant provides up to 4% of your purchase price or appraised value up to $10,000. The entire amount is forgiven when escrow closes. To qualify, your household income must be no more than 80% of the Area Median Income.

Note that the home buyer grant must be applied for with the City of San Diego Deferred Loan (above). You must have at least $1,000 in reserve and maximum assets of $10,000 (plus $500 for every additional household member).

City of San Diego Forgivable Closing Cost Loan | SDHC

This City of San Diego San Diego first time home buyer program is a forgivable form of closing cost assistance with a lower cap than the deferred loan option. If you earn up to 100% of the San Diego Area Median Income, you can receive up to 4% in closing cost assistance capped at $10,000. This closing cost assistance is completely forgiven after six years as long as you remain in the home.

You are required to have at least $1,000 in reserve but maximum assets of $10,000 (plus $500 for every additional household member). There is a $200 application fee for this program.

Chula Vista First Time Homebuyer Program

The City of Chula Vista operates its own San Diego County first time home buyer program. Low-income first time buyers purchasing a qualifying home in Chula Vista can receive a 3% interest deferred loan of up to 30% of the purchase price or $70,000.

The program requires completing Pre-Purchase Counseling and Homebuyer Education. You will need to contribute at least 3% toward the down payment, have less than $10,500 in liquid assets, and have gross household income below 80% of the San Diego Area median. The maximum purchase price for the home is $350,000.

El Cajon Homebuyer Assistance Programs

Qualified buyers can qualify for the American Dream Program. The El Cajon first time home buyer program offers down payment assistance through the HOME program. With the shared-appreciation equity loan, you can receive up to $50,000 to buy a condo or $100,000 to buy a single-family home in El Cajon. No payments are necessary and repayment is deferred until the home is sold, transferred, or non-owner occupied.

You do not need to contribute toward your down payment but you must pay all closing costs. These funds can come from gift funds. You must have household income that does not exceed 80% of the area median income. The purchase price cannot exceed $344,375 for a condo or $617,500 for a single-family home. Finally, a home buyer education course must be completed.

Escondido First Time Homebuyer Program (HELP)

The Escondido Homebuyer Entry Loan Program is a first time home buyer program that offers closing cost and down payment assistance through the City of Escondido. First time buyers who meet income guidelines and buy a home in Escondido below the maximum purchase price can qualify for a low-interest down payment assistance loan of up to 5% of the purchase price.

The HELP program imposes a 10-year affordability restriction on the home. It can’t be rented out for 10 years. The loan does not need to be repaid until the home is refinanced, sold, transferred, or no longer your primary residence.

Poway First Time Home Buyer Program (SHOP Program)

The Supporting Home Ownership in Poway (SHOP) Program offers deferred payment 0% interest loans for first time home buyers. The SHOP assistance loan is not repayable for 45 years unless the home is sold or transferred. The home can only be sold at a restricted sales price to ensure it remains affordable for the next home buyer. The 45-year term is restarted for each new, income-qualified buyer.

You must meet asset and income guidelines to qualify for the SHOP Program. You will need a 3% down payment if you are low-income and a 5% down payment if you are moderate-income.

The City of Poway also participates in the state-funded Building Equity and Growth in Neighborhoods (BEGIN) program. This is a grant in the form of a deferred payment down payment assistance loan for buyers of new homes in BEGIN projects. The loan has a 1% or 3% interest rate that cannot exceed 20% of the sales price.

San Marcos Down Payment Assistance Program (DAP)

The City of San Marcos offers down payment assistance funded by the CalHome Program. First-time home buyers in San Diego County buying a home in San Marcos can receive a deferred loan in the form of a silent second mortgage. The down payment assistance loan is up to 20% of the purchase price up to $56,000 with 3% interest. The home can be appraised at up to $598,000. There is a $350 non-refundable Downpayment Assistance Program application fee.

 

Do you think you may qualify for any of these programs as a San Diego first time home buyer? Reach out to the relevant program as soon as possible to begin working with a lender before program funds run out. Once you’ve started the process of buying a home, give us a call at Republic Moving & Storage for a free, affordable moving estimate. We’ll help you settle into your very own home without the stress and hard work!

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