CalHFA loan Good Idea?

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In California, is a Cal HFA loan a good idea? They pay your down payment for you and closing costs and then whenever you sell or refinance the house you pay them back, on the back end. Interest rates can be 0-2% and u can pay it back any time. My friend bought a house that way and he's pretty happy with it. Just wondering down the road if there's any unforeseen problems with doing that. It can't be that bad if it gets you out of renting right?

Originally posted by @Nancy Lucca :

In California, is a Cal HFA loan a good idea? They pay your down payment for you and closing costs and then whenever you sell or refinance the house you pay them back, on the back end. Interest rates can be 0-2% and u can pay it back any time. My friend bought a house that way and he’s pretty happy with it. Just wondering down the road if there’s any unforeseen problems with doing that. It can’t be that bad if it gets you out of renting right?

CalHFA and GSFA are both great down payment assistance programs. I like GSFA a little better - each year 1/3 of the 2nd mortgage is forgiven, after 3 years the entirety is forgiven... that's pretty close to it being "free money." GSFA also tends to close quicker, making your offer more appealing to sellers and listing agents & more likely to be accepted (everything is academic without that). GSFA also has more liberal income limits.

Note for folks that found this on google: both programs change on a regular basis, if you're reading this more than a few months in the future you should reach out to a California lender that does DPA for the latest and greatest.