A new program from California state officials lets first-time homebuyers borrow a down payment at a 0% interest rate, reports KTLA. The Forgivable Equity Builder Loan program was launched in April and provides forgivable loans to these homebuyers for up to 10% of the home's purchase price.
According to the California Finance Agency, if the homebuyer stays in the home for five years, they won't have to repay the junior loan. On the other side, borrowers may have to pay back a portion of the loan if they stay in the home for less than five years. "We have to use every tool in our toolbox to tackle the housing affordability crisis head-on," said Governor Gavin Newsom in a statement announcing the program.
State officials said the goal of the program is to give first-time homebuyers a head start with immediate equity, helping Californians build intergenerational wealth. The program comes at a time when the state's median home prices and interest rates are reaching some of the highest levels California has seen. According to the California Association of Realtors, only 24% of California households could afford to purchase the $797,000 median-priced home during the first quarter of 2022.
For information on eligibility and how to apply for the program, click here.