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In most of California, there are several down payment assistance (DPA) programs available. Not all of the options that are available though, are also viable options in our East Bay housing market.  Typically, if you are using any sort of city, regional, or state assistance programs, you sacrifice a bit of your competitive edge while making an offer in our heated market.  So, when researching assistance programs, choose the programs that keep you in the game, as opposed to the ones that will take you out.

How do you get taken out of the homebuyer game?

Most assistance programs in our area do not get accepted due to the competitive landscape currently prevalent in our market combined with the extended close of escrow times which most assistance programs require. When the market is hot, a seller won’t wait for a buyer who needs 45 days to close escrow.

A Program That May Work For You

With all the programs that are out there, we are alerting you to one specific assistance program, the GSFA Platinum Program.  This program doesn’t delay closings, is open to the most buyers, is not first time homebuyer specific, and is free money from the state (meaning you don’t have to pay it back…ever). On top of this, it’s also the easiest assistance program to qualify for, making it the most realistic option for potential homebuyers in our area.

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Typically, assistance programs have pretty stringent requirements on income, where this program has the most favorable income limit of any assistance program.  When dealing with Bay Area salaries, this is really the only realistic option out there.

“What I have found, is that if buyers try to go another route with an assistance program (CALHFA or the like), it will typically push them out of our market due to competition and pricing.  All assistance programs are great, and much more successful, in a lesser competitive environment than our own.  So, I provided this information about the GSFA Platinum Program to focus on an option that was actually useful and tangible in our area,” said Dominic Villa, Summit Funding.

Elements of the GSFA Platinum Program:

  • The program is basically a grant, so it is essentially a gift from the state of California. That means, and this is the best part, you don’t have to pay it back!  It’s essentially free money!
  • It will gift you up to 5% of your loan amount to be applied towards either the down payment or closing costs. However, they do charge a 1.5% fee, so it effectively means they are only gifting you a maximum of 3.5% of the loan amount.
  • Not limited to first time homebuyers– Anyone is eligible for this, as long as they are purchasing a new primary residence.
  • Higher income limits than any other assistance program out there (as long as you go with a conventional mortgage), which bodes well for higher income earners in the Bay Area. Most assistance programs are immediately ruled out due to income limits, because the average income is higher in the Bay Area compared to most other places in California.
  • Time is on your side-this program doesn’t slow down your close of escrow time. Typically, with a down payment assistance program, it will require a long and intense process that will make your close of escrow 35 days or more, which is detrimental in a competitive market when time mean everything if you are making offers on properties with multiple offers.  This program has a seamless approval process, so a 21-day or less close of escrow is still very possible with this program!
  • Smaller downpayment required-This program could be a fantastic option for a younger buyer trying to get their first place and may be a little tight on funds.
  • Caveats to this program: The buyer has to have a minimum of a 640 FICO score and a homebuyer education class is going to be required if the purchaser is a first time homebuyer. There are income limits (although higher than other programs), so a buyer could potentially be ineligible for this program if they make too much money.

Berkeley Hills Realty assists homebuyers in finding the best local mortgage professionals. Thank you to Dominic Villa, Summit Funding, for his help in creating this informative article for us! You can reach Dominic at dominic.villa@summitfunding.net.