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San Diego First-Time Homebuyer Programs

Updated: Mar 15, 2022

San Diego first-time homebuyer programs offer several options. These include government-backed mortgages from federal, California. the City of San Diego and San Diego County.

But first, you need to understand the difference between conventional and government-backed home loans.

San Diego First-Time Homebuyer Programs

Conventional versus Government Loans

A standard conventional loan obtained from a bank or lending institution usually requires a 20% down payment. However, this might get costly.

The California Association of Realtors (C.A.R.) reported in July 2021 that the average statewide single-family home median price was $811,170. Thus, at 20% the average down payment amounted to $162,234. A Condo or townhouse unit averaged a median price of $600,000 statewide resulting in a down payment of $120,000.

In San Diego, the average single-family home median price was $860,000 requiring a down payment of $172,000.

The good news is that government-backed home loans (mortgages) require much lower down payments.

So, if you haven’t saved $120,000 for a statewide condo or townhouse or $172,000 for a San Diego single-family home down payment, don’t worry. Check out these City of San Diego and San Diego County-backed mortgage programs.

San Diego First-Time Homebuyer Programs

The City of San Diego and San Diego County offer different buyer programs for their first-time homebuyers. Let’s explore both of them.

City of San Diego First-Time Homebuyer Programs

The San Diego Housing Commission (SDHC) helps low- and moderate-income families to buy their first homes in the City of San Diego. It’s called the SDHC First-Time Homebuyer Program which helps with buying a condominium, townhome, or single-family home. Here’s a summary of the benefits.

Homeownership Grant Program

Qualifying home buyers receive 4% of the purchase price (up to $10,000) to pay for closing costs as a grant paid at the escrow closing.

Grant eligibility requires:

  • Earns no more than 80% of San Diego’s Area Median Income (AMI) determined by HUD; and

  • Can only apply with the 3% interest Deferred-Payment Loan Program (see below).

Deferred-Payment Loan Program at 3% Interest

San Diego First-Time Homebuyer Programs

Qualified applicants get 17% of the total purchase price as a down payment loan at a 3% interest rate.

The payout is deferred for 30 years unless the owner stops occupying the home as a primary residence or sells. Then, the principal loan amount and accrued 3% annual interest get repaid.

Qualification requires the buyer to get a:

  • First trust deed fixed-rate loan;

  • Have a good credit rating;

  • Have adequate income;

  • Provide a minimum down payment of 3%; and

  • Attend a homebuyer’s education class.

Closing Costs Forgivable Loan Program

Similar to the above Homeownership Grant Program, but a loan instead of a grant. The home buyer receives 4% of the purchase price (up to $10,000) to pay for closing costs.

The loan is forgiven after six years on the condition the owner continually occupies the home and no further encumbrances (like a lien) attach to the property.

San Diego County CalHome Programs

Besides helping first-time homebuyers in the City of San Diego, SDHC helps these buyers in the rest of San Diego County. This program helps first-time buyers with the down payment and closing costs. Here are the details:

Low-Interest Loan

Qualified applicants receive a loan or up to 17% of the purchase price for the down payment and 4% of the purchase price for closing costs. This applies to a condominium, townhome, or single-family home.

These funds are a loan at 3% simple interest accrued yearly. This can be a second mortgage on the home. No monthly payments as “deferred-payment” loans are deferred until the home is sold, refinanced (except for an FHA Streamline Refinance), or paid off. The one-time payoff includes the original principal loan amount and the accrued interest.

Property Requirements

The CalHome Program requires the home to become your primary residence.

San Diego County Eligible Locations

In addition, the home is located within the San Diego County Jurisdictional Boundaries which include the cities of:

  • Carlsbad;

  • Coronado;

  • Del Mar;

  • Encinitas;

  • Imperial Beach;

  • La Mesa;

  • Lemon Grove;

  • Poway;

  • San Marcos;

  • Santee;

  • Solana Beach;

  • Vista; and

  • Unincorporated areas of San Diego County.

California Administers Federal First-Time Homebuyer Programs

If none of the San Diego first-time homebuyer programs fit you, options exist.

The State of California administers several federal first-time homebuyer programs like:

CalHFA Mortgage Programs – The California Housing Finance Agency sponsors favorable conventional and government loans. First-time homebuyers can take advantage of 30-year fixed-rate and homebuyer assistance;

Conventional 97 – Obtained from Fannie Mae or Freddie Mac federal programs offer 3% down with a minimum Credit Score of 620. Read about Credit Scores from our broker, Big Block Realty’s blog “How to Successfully Buy a Home”. In addition, a Mortgage Insurance policy guaranteeing your total payments is required, but ends after a few years;

FHA Loan – The Federal Housing Administration (FHA) offers 3.5% down with a minimum 580 Credit Score. The mortgage insurance remains in place until you either move, pay off the mortgage, or refinance to a different mortgage type;

USDA Loan – People with low-to-moderate income who buy in designated rural areas qualify for a 0% down payment. But, the Credit Score minimum varies upon the lender. Most often the Credit Score minimum is 640. This program offers low mortgage insurance rates;

VA Loan – Veterans and service members get the best deal. Zero down payment with a lower Credit Score which varies with lenders, but often 620. In addition, no mortgage insurance is required after the closing; and

CalVet assistance for veterans and service members is designed to help understand the homeownership process in a stress-free manner. Securing a CalVet home loan is easy. Several VA loan options are offered for home buying in California. Call CalVet loan providers to verify eligibility at (866) 653 – 2510 Monday – Friday from 8 am to 5 pm.

Tip: These programs allow you to use down payment assistance or “gifted money”. So, relatives can gift you the down payment.

The State of California First-Time Homebuyer Programs

Besides administering federal homebuyer assistance programs, the State of California offers its residents separate first-time homebuyer programs. These include:


For a California first-time homebuyer, a good place to start looking for assistance is the California Housing Finance Agency (CalHFA). This state agency offers six programs for first-time homebuyers with their special interest rates:

  • CalHFA FHA program;

  • The CalHFA VA loan program;

  • CalPLUS FHA loan program (combines with the CalHFA Zero Interest Program (ZIP) to pay the closing costs);

  • CalHFA conventional loan program;

  • The CalHFA USDA loan program; and

  • The CalPLUS conventional loan program (combines with the CalHFA Zero Interest Program (ZIP) to pay the closing costs).

In addition, the CalHFA offers an eight-hour homebuyer education online course for $99. This is a mandatory course to become eligible for the state’s financial help.

Also, one-on-one homebuyer counseling sessions are available either virtual or face-to-face. The fee varies depending on your choice of service.

The state’s financial help depends on income and purchases price limits. Also, your credit score of 660 or higher is required. The CalHFA website provides a wizard to see if you are eligible.

CalHFA Details

Homebuyers who qualify can borrow up to $11,000 for the down payment and closing costs. This program is called the CalHFA MyHome Assistance Program.

Qualifying for the MyHome Assistance Program requires:

  • A first-time homebuyer;

  • Purchasing a single-family home;

  • Living in the home as the primary residence;

  • Completing home buyer’s education counseling; and

  • Meeting income limits.

Note: The following do not qualify for the $11,000 DPA:

  • Fire department employees;

  • School employees; and

  • Those who purchase manufactured or new construction homes, or homes with an Accessory Dwelling Unit (ADU).

First-Time California Homebuyer Grants

California offers many Down Payment Assistance Programs (DPAs). The link lists all the city and county DPAs in California.

For example, San Diego County DPA under its San Diego Home Consortium program offers these types of financial assistance with the FHA:

  • CalHome Program providing assistance funds for first-time homebuyers to pay upfront costs getting a mortgage; and the

  • Homebuyer Down Payment & Closing Cost Assistance (DCCA) program.

San Diego First-Time Homebuyer Programs – Conclusion

Our San Diego first-time homebuyer programs explanation also includes available State of California loan programs. We explained:

  • Conventional versus government loans;

  • California First-Time Home Buyer Programs;

  • First-Time California Home Buyer Grants;

  • City of San Diego First-Time Home Buyers Programs; and

  • San Diego County CalHome Programs.

Are You a San Diego First-Time Homebuyer?

As you just read, our blog posts provide you with useful information.

SoCal Lifestyle Realty provides more than educational blog posts. Our Realtors offer many years of experience with the greater San Diego housing market to help you find the ideal home.

Contact us to learn more about our home-finding services in San Diego County along with assistance with first-time home buyer loan programs.

Steven Rich, MBA – Guest Blogger

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