CalHFA Dream For All is coming back
Does this program truly help more people become homeowners?
by Alisa Johnson, January 2024
There is a question that has swirled around for a long time in my head.
Do down payment assistance programs really help get more buyers into homes? Would those buyers have been able to purchase without the assistance?
Last year when CalHFA released $25 million in funds for the CalHFA Dream for All program the funds were gone in less than 11 days. Did these funds actually go to first-time home buyers in need? Or did they get dispersed to just about anyone who applied in those first 11 days? I am not sure we will ever know the true answer to this but the program is on its way back but this time it has some adjustments to qualifications and a more controlled way to distribute funds.
Some of the qualifications for the new program release are as follows:
- At least one applicant must be a California resident
- At least one applicant must be a First-Generation Homebuyer – **this is a new requirement added with this release
- A homebuyer who has not been on title, held an ownership interest, or has been named on a mortgage to a home (on permanent foundation and owned land) in the United States in the last 7 years, and
- To the best of the homebuyer’s knowledge whose parents (biological or adoptive) do not have any present ownership interest in a home in the United States or if deceased whose parents did not have any ownership interest at the time of death in a home in the United States, or; PB.2023-03 Page 2 of 2 California Housing Finance Agency
- An individual who has at any time been placed in foster care or institutional care (type of out-of-home residential care for large groups of children by non-related caregivers)
- Income must be less than or equal to $178,000 in Nevada County, or $180,000 in Placer County
- Maximum Shared Appreciation Loan amount is $150,000 or $20% of the sales price or appraised value, whichever is less. – Shared appreciation loan can be used for down payment and closing expenses!
- Minimum Combined Loan-To-Value (CLTV) is 95.00%
- 2/1, 1/1, and 1/0 temporary buydowns are permitted
These programs are created with the vision in mind to help more people become homeowners.
The 1st $25 million(2023) did not have the same requirements and I fear that a lot of those funds helped people purchase homes with those funds that had other means to afford home ownership.
So will 2024 be a better use of CalHFA Dream for all funds?
I believe so. If you are paying rent and spending over $2500 a month in rent then home ownership might be a great option for you and down payment assistance might be a great boost to get you there.
Homeownership is costly and you should be prepared as it is likely the largest investment you will make in your lifetime.
Some things that you can start now to prepare to be a homeowner are as follows.
Budgeting-Create a household budget.
Savings-Create a savings plan to have 6 mortgage payments in savings for emergencies.
Research– Gather information from your RE agent, lender, etc on costs you will incur in the buying process.
Homeownership is the best investment you can make so get educated, be prepared, and look into all options that will support you becoming a homeowner.
Farm animals, Rides, Fair Food and More!
We are so blessed here in Grass Valley to have our beautiful Nevada County Fairgrounds which hosts the annual fair.
From strolling the flower-lined pathways to greeting old friends and bumping into neighbors our fair is truly one of a kind.Some of the best things about the fair are the people and getting to enjoy traditions like visiting all the FFA and 4H animals. Or, slowly making your way through all the exhibit halls with everything from “The Ugliest Cake Contest” to the most beautiful quilts. And of course, rides and food.
Our local fair is a great place for local nonprofits to raise money to help support their cause.
From Local schools to Rotary groups and many more you will see a variety of groups represented. Treat Street is where our local nonprofits get to host a specific food booth and earn money to support their groups. From Ice Cream cones, Burgers, Pulled Pork Sandwiches, Corn Dogs, Pizza to Baked Potatoes you will be sure to find something you love.
The Nevada County Fair for me has been an event we look forward to each year. Being raised in Nevada County this is the week we have nonstop entertainment and fun right in our own backyard.
This year’s theme “Country Roots and Cowboy Boots” is a great representation of our fair and life here in Nevada County.
If you want to experience this year’s fair, save some time from August 9 to 13, 2023.
If you’re selling your home, it’s time to get familiar with the VA home loan — yes, even if you aren’t military yourself. Here’s why. Veterans or active duty military homebuyers are likely to use the VA loan when purchasing a home.
What you’ll learn in this article:
- What is the VA loan?
- Preparing Your Home to Sell
- Research Housing Rates for Your Area
- Market to Military
- Meeting VA Requirements
- The VA Home Inspection
What is the VA loan?
For those of you unfamiliar with it, the VA helps those who are eligible purchase a home at a competitive interest rate, often without requiring a down payment or private mortgage insurance. That means that they not only offer zero down payment loans, but also have lower credit requirements than alternative financing options.
As you can imagine (or have used yourself), the VA loan is a popular choice. So if you’re near a military installation, the likelihood of your potential buyers using this lending option skyrockets. Don’t be mistaken, while there are duty stations tucked away on their own, there are plenty positioned in the heart of major cities that you might not even realize. The point? Thorough research can help you to consider all aspects of the buyers in your area. As a home seller in a heavily dominated market, consider getting to know the lending terms of the VA loan and how to market to VA home loan buyers.
Preparing Your Home to Sell to a VA Home Loan Buyer
There are a couple of key things to know about selling your home to a VA home loan buyer.
“One is that there isn’t a safer bet to close on the market. VA loans have had a higher average closing success rate than conventional loans over the last five years. The other piece is that sellers are not required to pay any costs on behalf of a VA buyer. There’s a misconception that sellers have to pay a VA buyer’s closing costs or are on the hook for repairs if the VA appraisal turns up issues. This isn’t a zero-sum situation, and both are matters of negotiation between buyer and seller.” — Chris Birk, Director of Education for Veterans United Home Loans and the author of The Book on VA Loans: An Essential Guide to Maximizing Your Home Loan Benefits.
Research the Local Housing Rates for Your Area
Here’s an interesting fact: you can look up how much military servicemembers and their families are allotted each month for housing. It’s called the Basic Housing Allowance (BAH). While it isn’t a perfect representation of each family’s personal budget, it does provide a decent baseline to understand where your property falls into the mix.
- Use the Department of Defense’s Basic Housing Allowance calculator to learn how much service members in your area are paid each month.
- Enter your zip code and a pay grade. Unless you live close to the Pentagon, you’ll be better served by estimating housing rates on low to mid-level pay grades, such as an O3 or E5.
Estimate the mortgage payment for your property.
Using a mortgage calculator, such as MortgageCalculator.org or Bankrate’s mortgage calculator, you can input your asking price, property tax, and estimated homeowner’s insurance. Consider adding two to three percent to your asking price to account for the VA funding fee for first- or second-time VA homebuyers.
Do the math.
Given the BAH for the local area and the cost of your home, will military homebuyers in your area be able to afford the monthly mortgage payment for a zero down payment VA loan? If your home sale price fits the military homebuyer’s budget, then great! It’s time to market to the military community. If not, homebuyers have the option to purchase your home with an alternative loan product—like state down payment assistance programs and FHA loans. However, for those who qualify, the terms of the VA loan are hard to beat.
If you’re in a tough selling market, consider working with your real estate agent to target homebuyers who may be eligible for these products.
Market to Military
When you market to military homebuyers, you’re working with a unique clientele who, unlike any other homebuyer, operate on a time crunch.
Since military families receive PCS orders for an average of three years, they don’t have the luxury to take weeks or months to find a home to buy. Instead, many families find a home within just a few days.
Knowing this about the military home buying market will help you understand why it’s critical to have great photos, a detailed description of your property’s layout, and a video home tour. Each of these marketing tools will help ensure that you make it onto your military homebuyer’s shortlist of potential homes.
The Logistics: Meeting the Requirements of the VA
The process takes longer when you sell to someone who is using a VA Home Loan than that of most other mortgages.
One way to expedite this process is to make sure that there aren’t any repair issues with your home that may cause either delays for repair or an outright rejection of your home. While the home buyer is required to pay for the inspection and appraisal, it’s not a bad idea to conduct your own pre-inspection with the intent to get your house ready to sell quickly.
For a few hundred dollars, you can mitigate this situation by hiring an inspector who is familiar with VA requirements. Consider it money well spent, as the VA loan follows a set of Minimum Property Requirements (MPRs) set to ensure that the property is safe, sanitary, and habitable.
VA Home Appraisal
“The appraisal process looks a bit different. Beyond the typical home valuation, the VA also considers broad property condition requirements. These Minimum Property Requirements are rooted ensuring Veterans are purchasing homes that are safe, sound, and sanitary. This assessment isn’t as in-depth as a home inspection, and any issues raised by the appraiser can be addressed in order to keep the deal moving forward.” — Chris Birk
Common things evaluated by the home appraiser:
- Heating and electricity. If the home has a wood-burning stove, is there a backup system?
- Water. Does the home have a water heater and access to drinking water and a working septic?
- The roof. Does the roof have a substantial amount of life left? Are there any leaks?
- Access. Can you reach the property by foot or car by way a private or public road year-round?
- Defects and deterioration. Is the home free of defects to include poor construction, or wood-eating insects like termites?
- Paint. Is there any lead-based paint that’s chipping or peeling that needs repaired?
- The location. Is the home located on a gas or petroleum pipeline or near high-voltage electric lines?
Tips for finding a home inspector:
- Get recommendations. You can’t be expected to know the local professionals when you’re new to the area. Check with your real estate agent, loan officer, or experienced friends who can point you in toward a respected home inspector.
- Look within reputable organizations. Organizations like the American Society of Home Inspectors and the National Association of Home Inspectors require certifications for membership. Finding a local who belongs to one of these groups assures a high standard of service.
- Know your state laws. Licensing requirements vary from state to state. If you’re unsure of yours, ask your real estate agent and make sure your home inspector meets the criteria.
- Ask for a sample inspection report. Nothing is better to determine the quality of someone’s work than viewing a sample of their job. This can tell you a lot about an inspector’s level of experience. You’re looking to make sure the report is clear and that it includes images of any identified issues around the property. You’ll also want to see recommendations made for potential homebuyers.
- Consider your budget. Home inspections aren’t free. The cost can vary depending on the provider, the size of the home, and location. However, they most often fall within $300 to $500.
VA Home Inspection
Things the home inspector looks for:
- Structure. What’s the condition of the property’s construction (walls, floors, foundation, roof, and ceilings)?
- Exterior. How much life is left in the current siding, windows and trim? Looking at other features– how’s the exterior lighting and fences? Is there proper drainage based on grade and elevation?
- Plumbing. What are the pipes made of? Is everything up to current standards to include the toilets, showers, sinks, faucets?
- Systems. Are the chimney, fireplace, water heater, furnace, A/C unit, and septic system all in good working condition?
- Roof and attic. Is the framing sound? Is there proper insulation and ventilation?
- Electrical. Is the electrical wiring properly grounded? Are all the light fixtures and the main electrical breaker safe and working correctly?
- Appliances. What’s the condition of the appliances like the dishwasher, range, built-in microwave, garbage disposal, smoke detector, and any other relevant small appliances in the home?
At the end of the day, remember that VA home loan buyers want the same thing as everybody else: location, good schools, and more. The basics to preparing your home to sell for a VA home loan buyer are the same as most others; it’s simply a few particulars that keep you on your toes.
By Danielle Keech
Johnson’s Sierra Lifestyle Team is experienced in working with VA buyers and sellers. We are here to guide you through the process.
Way too many of us have a story about our credit card getting hacked or about being a victim of one of the massive data breaches in recent years. As technology becomes more and more a part of our financial lives, it becomes increasingly important to keep a close eye on our personal credit.
By monitoring your credit score and credit report, you can make sure you know if someone has opened unauthorized accounts in your name.
Monitoring your credit has the added bonus of helping you make sure your credit rating is where you need it to be.
The Easiest Ways To Monitor Your Credit
To put this task in “set it and forget it” mode, you should set up an account with at least one website designed to monitor your credit. (If you’ve frozen your credit, you’ll need to unfreeze it with at least one credit bureau first.)
Monitoring Your Credit With Credit Karma and Credit Sesame
When we talk about monitoring your credit, we’re talking about keeping an eye on both your credit reports and your credit scores.
Credit reports include all the details on your credit accounts, both current and closed. The reports track payments and other information for every loan, credit card and line of credit you have.
Your credit scores are numbers based on that credit history and activity.
If you have any credit history at all, the “big three” credit bureaus — TransUnion, Experian and Equifax — will each have both a credit report and a credit score associated with your accounts. The good news is that you can access all of this information for free online.
Money expert Clark Howard’s favorite site for monitoring your credit is Credit Karma. This site lets you keep tabs on your credit score and view credit reports for free. Once you set up your account, you’ll get:
- Your estimated credit scores from TransUnion and Equifax
- Access to your credit reports from TransUnion and Equifax
- The option to get an alert when your credit score changes or something is added to your credit report (credit monitoring)
- Additional services including identity monitoring, free tax filing, and access to your auto insurance score
Again, you will need to set up your Credit Karma account before you freeze your credit, or you’ll need to unfreeze your credit in order to sign up.
Read more about signing up for Credit Karma here.
Credit Sesame is a site similar to Credit Karma but doesn’t offer quite as many services. It’s also largely free and signing up gets you:
- Your estimated credit score from TransUnion
- The option to get alerts when your credit score changes or something is added to your credit report (credit monitoring)
- Additional services such as identity protection and limited identity theft insurance
Unlike Credit Karma, Credit Sesame does not give you free access to any of your credit reports.
Read more about signing up for Credit Sesame here.
Other Ways To Monitor Your Credit
You may have noticed that neither Credit Karma nor Credit Sesame gives you access to your Experian credit report and score. But you can get your reports for free directly from both Experian and Equifax by creating online accounts with them (Experian also includes your credit score):
TransUnion does not currently provide free access to your credit report.
However, by law, you are entitled to one free copy of your credit report per year from each of the bureaus. AnnualCreditReport.com is the only place authorized by the federal government to give you access to all three at once.
Read more about the different ways to get your free credit reports here.
Final Thought: Freezing Your Credit
While monitoring your credit is crucial, it still means that you’ll find out if someone else has opened a credit line in your name only after the fact. So you should freeze your credit with all three major credit bureaus.
With a credit freeze in place, no one (not even you) will be able to open a new line of credit in your name without first unfreezing your credit — which only you should be able to do.
Get step-by-step instructions for freezing your credit with all three credit bureaus here.
Written by Clark.com Staff