Down payment assistance
Zero Down Home Loans
FHA needs 3.5% down. These programs lend you that 3.5%. Orange County is a high-balance county, and the right structure works at high-balance prices here.
"I have good income and no savings." That is the most common reason someone in Orange County is still renting, and it has almost nothing to do with whether they can handle the payment.
There are programs that lend you the down payment. The important part is which one you are put into, because that decides whether it works at Orange County prices or dies at the conforming limit.
Orange County is a high-balance county
This is the detail that gets people turned away for no reason.
Most down payment assistance is written for conforming loan limits. Orange County prices sit above that, so a lot of buyers here get told "you do not qualify" when what actually happened is that they were shown a program that does not reach.
The 3.5% repayable structure is eligible at high-balance limits. That is the one that works here.
The two structures
Repayable second
- 3.5% assistance, at conforming or high-balance loan limits
- 15-year term, fixed rate about 2% higher than your first mortgage
- A buydown can be applied to the second lien to match your first
- A 5% version exists, but that one is capped at conforming limits
It is a real second payment. Not free money.
Forgivable second
- 30-year term, 0% interest, no monthly payment
- Forgiven at your request after 60 consecutive on-time payments on your first mortgage
- Conforming loan limits only, so this one does not reach high-balance Orange County prices
Five years of paying on time and the assistance goes away. That is genuinely excellent, if your price fits inside conforming limits. For many buyers that means looking at Corona, Chino Hills or further out. Mortgage broker in Corona.
The terms
| Assistance | 3.5% (or 5% at conforming limits) |
| High balance eligible | Yes, on the 3.5% repayable |
| Income limit | None on FHA, any AMI or SMI |
| First-time buyer required | No |
| Minimum credit score | 640 |
| Debt-to-income | Set by the automated underwriting decision, not a fixed cap |
| Units | 1 to 2 |
| Minimum LTV / maximum CLTV | None |
| Temporary buydowns | Allowed, 2-1 and 1-0 |
| Gift funds | Allowed for down payment and closing costs |
| Non-occupant co-borrowers | Allowed |
| Manual underwriting | Allowed |
| Your money required | $0 down |
You still pay closing costs, and a seller can contribute toward those. Gift funds are allowed too.
What it asks of you
A homeownership education course, for at least one occupying borrower. It is a real requirement, not a formality. Build the time into your schedule before you are in escrow.
That is the trade. A different assistance program I have access to skips the class entirely, but it also blocks high balance, blocks buydowns and caps your debt ratio at 43%. In Orange County that is usually the worse deal.
Say this part plainly: the repayable one is a loan
You will have two payments. The second is at a rate above your first.
Anyone describing the repayable structure as free money is confused or selling. The forgivable structure genuinely does go away, and that is the one to reach for when your price allows it.
The real constraint to plan around
Subordination and refinancing. Before you count on refinancing when rates drop, ask what the second lien allows. Some assistance seconds restrict subordination for a set period, which means you cannot refinance the first without paying the second off. Get the answer in writing for your specific program before you close.
Who this is genuinely good for
- Solid income, thin savings, and a reason to stop renting now
- Buyers above the income limits of the usual assistance programs
- Repeat buyers, who are locked out of most first-time-buyer help
- Buyers who would otherwise drain their emergency fund to close and then own a house with no reserves
Who should not use it
- Anyone who is stretching, where a second payment is what breaks the month
- Anyone with a short time horizon, where the forgiveness period will not be reached
- Anyone who can put money down comfortably. Less leverage is cheaper leverage
Check VA first if you served
No down payment, no monthly mortgage insurance, no second mortgage at all, and no county loan limit with full entitlement. It beats every program on this page. VA loans.
Related
- Home purchase loans
- Temporary buydowns — yes, you can stack them
- Manufactured, mobile and barndominium loans
Let's find out what you actually qualify for
Questions people ask
Does zero-down financing work at Orange County prices?
Yes. Orange County is a high-balance county, and the 3.5% repayable structure is eligible at high-balance loan limits. Some other assistance programs cap out at the conforming limit, which is why people are told no. It depends entirely on which program you are put into.
Do I ever have to pay the assistance back?
It depends which structure you use. The repayable second is a real 15-year loan at a rate about 2% above your first. The forgivable second has a 0% rate and no payment at all, and is forgiven at your request after 60 consecutive on-time payments on your first mortgage. The forgivable option is limited to conforming loan limits.
Is there an income limit?
Not on the FHA version. Any borrower income level is allowed, at any percentage of area or state median income. That is unusual, and it is why this works in a high-cost market where most assistance programs price people out.
What credit score do I need?
640 minimum. Your debt-to-income ratio is set by the automated underwriting decision rather than a fixed cap, so there is more flexibility than most assistance programs allow.
Can I combine this with a seller-paid rate buydown?
Yes. 2-1 and 1-0 buydowns are available, and the second lien can be bought down to match your first. Not every assistance program permits this, so it is worth asking about specifically.