Hey there! Navigating the home-buying process can feel overwhelming, especially when you’re trying to figure out how to afford that hefty down payment. But don’t worry—the City of San Diego offers a fantastic program designed to help first-time homebuyers like you make that dream a reality. Let’s dive into the details!

What is the Program?

The City of San Diego First-Time Homebuyer Program, managed by the San Diego Housing Commission (SDHC), provides financial assistance to low- and moderate-income households looking to purchase their first home within the city limits. It’s funded through the U.S. Department of Housing and Urban Development’s (HUD) HOME program.

Who Can Apply?

To qualify, you’ll need to meet the following criteria:

• First-Time Homebuyer: You must not have owned a home in the last three years.
• Income Limits: Household income must not exceed 80% of San Diego’s Area Median Income (AMI). For 2024, this means a maximum income of $104,100 for a family of four.
• Minimum Down Payment: You must contribute at least 1% of the home’s purchase price from your own funds.
• Credit Requirements: A good credit rating and stable income are necessary.
• Homebuyer Education: You must complete an SDHC-approved homebuyer education course.

How Does It Help?

The program provides:

1. Deferred-Payment Loan:
   • Loan of up to 25% of the purchase price, capped at $125,000, to cover the down payment.
   • 3% simple interest rate.
   • No payments are due until the loan matures in 30 years, or you sell or move out.
2. Closing Cost Assistance:
   • A forgivable grant covering up to 4% of the home’s purchase price, not exceeding $10,000.

Potential Drawbacks

• Funding is Limited: Assistance is allocated on a first-come, first-served basis. You must be under contract to apply.
• Loan Repayment: If you sell or no longer live in the home as your primary residence before 30 years, the loan (plus interest) must be repaid.

How to Apply

Follow these steps to apply:

1. Check Income Eligibility: Ensure your household income falls below 80% of AMI.
2. Choose a Participating Lender: SDHC provides a list of approved lenders who will guide you through the loan process.
3. Complete Homebuyer Education: Attend a homebuyer education course approved by SDHC.
4. Find a Home: Work with a real estate agent to locate a property in the City of San Diego (ZIP codes starting with 921).
5. Submit Application: Your lender will submit your application and documentation to SDHC.

Program Availability

Location: The program is available to first-time homebuyers purchasing within the City of San Diego.

Pros and Cons

• Pros:
  • Substantial financial assistance: up to 25% of the purchase price for a down payment.
  • Forgivable closing cost grant of up to $10,000.
  • Deferred loan payments for up to 30 years.
• Cons:
  • Limited funding—applying early is essential.
  • Loan repayment required if the property is sold or you move before 30 years.

Final Thoughts

This program is a wonderful opportunity for first-time homebuyers in San Diego to bridge the financial gap and achieve their dream of homeownership. If you meet the eligibility criteria, reaching out to a participating lender is the next step. Start planning today, and good luck on your journey to owning your first home!

Sources

• San Diego Housing Commission – First-Time Homebuyer Program
• HUD Income Limits for San Diego County