SACRAMENTO, Calif. (KABC) -- The state of California launched two programs last month to help those interested in becoming homeowners, and one of them allows first-time homebuyers to borrow a down payment at 0% interest.
According to the California Housing Finance Agency, the Forgivable Equity Builder Loan program will help homebuyers with a loan of up to 10% of the purchase price.
The state says you don't have to repay the junior loan if you stay in the home for five years.
The loan is available to Californians whose income is less than 80% of the area median income in the county where the property is located. It can be used for down payment or closing costs, including rate buydowns.
"Home equity has proven to be one of the strongest ways for families to build and pass on intergenerational wealth and CalHFA is committed to improving equitable access to homeownership for all Californians," said CalHFA's Executive Director Tiena Johnson in a statement released earlier this month. "The Forgivable Equity Builder Loan, which gives first-time homebuyers a head start with immediate equity in their homes, will help California families build and pass on that wealth with a secure, stable home loan."
The loan is available through CalHFA's network of lenders, which covers every California county.
For more information on how to apply, visit the CalHFA's website.