Hey there! Navigating the home-buying process can feel overwhelming, especially when you’re trying to figure out how to cover that hefty down payment and those pesky closing costs. But don’t worry—the County of San Diego offers a fantastic program designed to give first-time homebuyers like you a helping hand.

Program Name:

County of San Diego’s First-Time Homebuyer Down Payment and Closing Cost Assistance Program

Source of Funding:

This program is funded by the County of San Diego and administered in partnership with the San Diego Housing Commission (SDHC). Source

Eligibility Criteria:

• First-Time Homebuyer Status: You must not have owned a home in the last three years.
• Income Limits: Your household income should be at or below 80% of the San Diego County Area Median Income (AMI). For example, as of January 2024, that’s $77,200 or less for a single individual and $110,250 for a family of four. Source
• Minimum Contribution: You’re required to contribute at least 3% of the purchase price from your own funds.
• Homebuyer Education: Completion of a HUD-approved homebuyer education class is mandatory.

Benefits:

• Down Payment Assistance: Receive a low-interest, deferred-payment loan of up to 22% of the purchase price to help with your down payment.
• Closing Cost Assistance: Get additional assistance covering 4% of the purchase price, up to $10,000, for closing costs.
• Deferred Payments: No monthly payments are required on the loan until you sell, refinance, pay off the first mortgage, or no longer occupy the property as your primary residence.
• Property Types: Eligible properties include new or resale single-family homes, condominiums, townhomes, or manufactured homes on a permanent foundation.

Potential Drawbacks:

• Repayment Terms: The loan, along with accrued interest, becomes due when you sell, refinance, pay off the first mortgage, or move out of the home.
• Property Location Restrictions: The home must be located in specific areas within San Diego County, including certain cities and unincorporated areas.
• Property Standards: The property must meet certain health and safety standards, which may require inspections and potential repairs before purchase.

Application Process:

1. Consult a Participating Lender: Begin by contacting a loan officer from the program’s list of participating lenders. They will guide you through the mortgage pre-approval process and assist with your application for assistance.
2. Complete Homebuyer Education: Enroll in and complete a HUD-approved homebuyer education course.
3. Property Selection and Inspection: Work with your real estate agent to find a qualifying property. Ensure the property meets all program standards and complete any necessary inspections.
4. Submit Application: Your lender will submit your application to the SDHC on your behalf.

Program Availability:

This program is available in the unincorporated areas of San Diego County and the following cities: Carlsbad, Coronado, Del Mar, Encinitas, Imperial Beach, La Mesa, Lemon Grove, Poway, San Marcos, Santee, Solana Beach, and Vista. Source

Pros:

• Significant Financial Assistance: The program provides substantial aid for both down payments and closing costs, reducing the upfront financial burden.
• Deferred, Low-Interest Loan: The 3% simple interest loan requires no monthly payments until a triggering event occurs.
• Broad Property Eligibility: A variety of property types are eligible, offering flexibility in home selection.

Cons:

• Income and Location Restrictions: The program is limited to low-income households and specific geographic areas.
• Repayment Upon Triggering Events: The loan becomes due upon sale, refinancing, payoff of the first mortgage, or change in occupancy status.
• Property Condition Requirements: Properties must meet certain standards, which may necessitate additional inspections and repairs.

Program Type:

This program offers a deferred-payment loan for down payment and closing cost assistance.

For more detailed information and to access the list of participating lenders, visit the San Diego Housing Commission’s First-Time Homebuyer Programs page.