Hey there! Navigating the home-buying process can feel overwhelming, especially when you’re trying to find the right assistance programs. Let’s chat about the Permanent Local Housing Allocation (PLHA) First-Time Homebuyer Mortgage Assistance Program in Sacramento. This initiative is designed to make homeownership more accessible for low-income individuals and families.

Program Details

Program Name: Permanent Local Housing Allocation (PLHA) First-Time Homebuyer Mortgage Assistance Program

Source of Funding: This program is funded through California’s Permanent Local Housing Allocation, established by the Building Homes and Jobs Act (SB 2) of 2017. The Sacramento Housing and Redevelopment Agency (SHRA) administers the funds locally.

Eligibility Criteria

• First-Time Homebuyer Status: You must not have owned a home in the past three years. Exceptions apply for displaced homemakers or single parents.
• Income Limits: Your household income should be at or below 80% of the area median income (AMI), adjusted for household size. For example, the limit is $85,750 for a four-person household. Source
• Creditworthiness: You need to meet PLHA’s credit underwriting guidelines.
• Debt Ratios: Your monthly housing debt ratio should be between 28% and 38%, with a total debt ratio not exceeding 45%.
• Homebuyer Education: Completion of a homebuyer education course is required.
• Owner Occupancy: You must live in the home as your primary residence.

Benefits

• Down Payment and Mortgage Assistance: Receive a deferred payment loan up to 20% of the purchase price, capped at $50,000, with a minimum loan amount of $10,000.
• Low Interest Rate: Enjoy a 1% simple interest rate, with both principal and interest deferred for the loan term.
• Flexible Loan Terms: The loan term is 30 years, matching the first mortgage term.
• First Mortgage Compatibility: Compatible with FHA, conventional, or CalHFA loans, provided they are 30-year fixed-rate mortgages with no negative amortization, balloon payments, or deferred interest.

Potential Drawbacks

• Repayment Conditions: The loan becomes due upon sale or transfer of the property, if it ceases to be owner-occupied, or at the end of the loan term.
• Geographic Limitation: This program is only available in Sacramento, which might limit access for those outside the area.

Application Process

1. Verify your eligibility by reviewing the program’s criteria, including income limits and credit guidelines.
2. Complete a homebuyer education course from an approved provider.
3. Work with a participating lender who will assist with your loan application and determine your qualification.
4. Submit all required documentation, including proof of income, residency, and first-time homebuyer status.

Program Type

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

Where is the Program Available?

This program is available exclusively in Sacramento, California.

Sources

• Sacramento Housing and Redevelopment Agency (SHRA)
• California Department of Housing and Community Development (HCD)