Buying your first home in the Coachella Valley or surrounding areas like Big Bear, Riverside County, or San Bernardino County can feel out of reach—especially when the biggest hurdle is coming up with a down payment. But what if I told you that buying a home with little to no money out of pocket is not just possible, but actively happening for families right now?
At MortgageWorks, we work hard to find real solutions for real people. If you’re ready to buy your first home but struggling with the upfront costs, this guide to down payment assistance—with insights from a real scenario I helped with just last week—will help you understand your options and decide what’s best for your situation.
Down payment assistance (DPA) programs are designed to help homebuyers cover the initial costs of purchasing a home, typically the down payment and sometimes even closing costs. In California, the California Housing Finance Agency (CalHFA) offers some of the most widely used DPA programs in the state.
These programs are specifically geared toward first-time homebuyers—defined as anyone who hasn’t owned a home in the last three years—and are available in Riverside County, San Bernardino County, Imperial County, Orange County, Los Angeles County, and San Diego County.
A couple recently came to me interested in buying a $589,000 home in Big Bear. They had good credit and income but admitted they didn’t have the funds for a down payment. That’s where CalHFA's FHA + MyHome Assistance program came into play.
We structured their loan like this:
First Mortgage: An FHA loan through CalHFA at 6.5% interest
Second Mortgage: The MyHome Assistance Program, which provides a second loan for the 3.5% down payment—in this case, $20,615
Third Option: CalHFA’s ZIP loan (Zero Interest Program), which could help cover closing costs up to 3% of the purchase price
The result? With this strategy, they could purchase the home with zero money out of pocket.
While this approach sounds too good to be true, there are trade-offs to consider.
The CalHFA FHA loan includes a 1-point loan fee, and the interest rate is currently 6.5%. If you use a ZIP loan to cover closing costs, the rate on the FHA loan rises to 7.25%.
By comparison, a standard FHA loan not tied to down payment assistance can be as low as 5.78% for qualified borrowers—saving you thousands over time.
The CalHFA program requires:
A minimum credit score of 660
A maximum debt-to-income ratio of 45%
Standard FHA loans, by contrast, allow for credit scores as low as 580 and higher debt-to-income ratios—sometimes up to 57%, depending on the borrower.
If you’re short on closing costs, you don’t have to use the CalHFA ZIP loan. A stronger option is to negotiate a seller credit for up to 3% of the purchase price. This keeps you from over-encumbering the home with additional debt and allows you to keep your interest rate lower.
In this strategy, the seller pays for your closing costs while your MyHome Assistance second mortgage still covers your down payment. That means:
No out-of-pocket costs
No third loan
More equity in the home from day one
You might assume these programs are only for low-income buyers. Not true. CalHFA’s income limits are surprisingly generous, and they vary by county. Here are some examples:
Riverside & San Bernardino Counties: $225,000
Imperial County: $185,000
Orange County: $270,000
Los Angeles County: $211,000
San Diego County: $258,000
As long as you don’t exceed your county’s income cap, you may be eligible.
Many first-time buyers assume that special programs mean better rates. The reality? Most first-time buyer programs focus on assistance with down payments—not lower interest rates. If you’re expecting below-market rates, you’ll need to dig into city- or county-specific programs, which are limited and competitive.
Here’s a quick recap to help you decide if a CalHFA DPA is right for you:
When It’s a Good Fit:
You have decent credit (660+) and manageable debt
You have no funds for down payment or closing costs
You’re willing to trade a slightly higher interest rate for the ability to buy now
When It’s Not the Best Option:
You have access to a gift, 401(k) loan, or other funds for a down payment
Your credit score is below 660
Your debt-to-income ratio is above 45%
You want a lower interest rate over the life of the loan
At MortgageWorks, we don’t push one product over another. Instead, we help you evaluate every available option based on your credit, income, goals, and timeline. Whether you’re leaning toward down payment assistance or wondering if a standard FHA loan might save you more long-term, we’ll give you a clear, side-by-side comparison so you can make the right move.
If you’re ready to explore your buying power—even if you think you’re not quite ready—reach out to us. At MortgageWorks, we’ll help you:
Understand your options
Break down real numbers with custom loan worksheets
Build a path to pre-approval
Negotiate seller credits
Secure funding that fits your goals
Contact Art Alvarez at MortgageWorks today to start your homeownership journey in the Coachella Valley, Riverside County, or beyond. 760-969-5023
We've been helping customers afford the home of their dreams for many years and we love what we do.
Company NMLS: 337037
www.nmlsconsumeraccess.org
777 E. Tahquitz Canyon Way, Suite 200-47
Palm Springs, CA 92262
Phone: 760-969-5023
Fax: 760-969-5024
art@mwloan.com
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