Hey there! Navigating the home-buying process can feel overwhelming, especially for first-time buyers. But don’t worry—I’m here to help you understand a fantastic opportunity that could make purchasing your first home in Elk Grove a lot more manageable.

The City of Elk Grove offers a Homebuyer Assistance Program designed to support first-time homebuyers by providing silent second, deferred-payment loans. These loans can cover up to 20% of the home’s purchase price or a maximum of $59,650, whichever is less. Additionally, the program may provide up to 3% of the purchase price to assist with non-recurring closing costs. [Source]

Eligibility Criteria

To qualify for this program, you need to meet the following requirements:

• First-Time Homebuyer Status: You must not have owned a home in the past three years.
• Income Limits: Your household’s annual gross income must be at or below the low-income limit for your household size. For example, as of February 2024, the limit for a household of four is $85,750. [Source]
• Owner Occupancy: You must intend to occupy the purchased property as your principal residence.

Benefits

• Deferred Payments: The loan is a 30-year, silent second mortgage with a 3% interest rate. No monthly payments are required, and repayment is deferred until the home is sold, refinanced, or no longer your primary residence. [Source]
• Down Payment and Closing Cost Assistance: The program helps reduce the financial burden of upfront costs, making homeownership more accessible.

Potential Drawbacks

• Property Restrictions: Eligible properties must be single-family detached, single-family semi-detached, approved condominiums, or halfplexes located within the City of Elk Grove. The property must be vacant at the close of escrow, and the purchase price cannot exceed the Sacramento County median home price, which was $525,000 as of February 2024. [Source]
• Homebuyer Education Requirement: All borrowers listed on the title must complete an eight-hour homebuyer education course with NeighborWorks Sacramento before purchasing. [Source]

Application Process

1. Pre-Approval: Obtain a pre-approval letter from a lender.
2. Application Submission: Complete the program application, including all required documentation, and submit it by mail or hand-deliver it to the City of Elk Grove. [Application Form]
3. Processing: Applications are processed on a first-come, first-served basis. Incomplete applications will not be processed, so ensure all required information is included.
4. Homebuyer Education: Complete the required homebuyer education course.
5. Property Selection and Purchase: Once approved, you can proceed with purchasing an eligible property within the program’s guidelines.

Program Availability

This program is available exclusively within the City of Elk Grove, California.

Pros and Cons

Pros:

• Deferred Payment Loan: No monthly payments required, easing financial strain.
• Low-Interest Rate: 3% interest rate is favorable compared to conventional loans.
• Closing Cost Assistance: Additional funds available to cover non-recurring closing costs.

Cons:

• Property Eligibility: Restrictions on property types and locations may limit options.
• Income Limits: Applicants must meet specific income criteria, which may exclude some potential buyers.
• Homebuyer Education Requirement: Mandatory course adds an extra step to the process.

Grant or Down Payment Assistance

This program provides down payment assistance in the form of a deferred-payment loan.

Sources

• Homebuyer Assistance Program – Elk Grove, California
• City of Elk Grove Homebuyer Assistance Program Flyer