The California Housing Finance Agency is now offering all low- to moderate-income Californians an affordable mortgage loan program that includes down payment assistance and was originally designed for first-time buyers.

A change in its financing model allowed the agency, based in Sacramento, to expand the program's availability at a time when first-time homebuyers are few and far between.

"Until two years ago all of our loans have been funded with proceeds from tax-free housing revenue bonds," which were subject to restrictions, says Eric Johnson, director of communications for CalHFA. "The federal government said they can be tax-free bonds only if they were used for first-time buyer loans."

With the bond market "pretty much frozen up over the past few years," he says, the agency is relying on other financing resources that free it to expand its reach. In addition, it is worth mentioning that the federal definition of a first-time homebuyer is "someone who hasn't owned a house for the past three years," Johnson says.

Citing a decline of California's homeownership rate to about 54.5% as of the end of the first quarter, "a full 10 percentage points below the national homeownership rate according to U.S. Census estimates," CalHFA said in a press release it expects to create opportunities for low-income buyers across the state.

CalHFA's mortgage programs include a first mortgage at up to 97% of the value of the home, combined with a second, low- or no-interest loan to finance a 3% down payment on the property. Borrowers can defer the repayment on their down payment assistance loan until they sell, refinance, or pay off the mortgage. CalHFA also offers a loan that comes with a grant of up to 4% of the first mortgage amount, to pay for energy efficient improvements to the home.

CalHFA programs, combined with federal tax credits and homebuyer education, can make homeownership affordable and sustainable, says Claudia Cappio, executive director of the self-supported state agency, which assists renters and homeowners without using taxpayer dollars.

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