Looking for California teacher home loans with no money down? At Home Loans For All, we can help you find what you need.
The state of California has a number of programs that are useful for teachers and other professionals who are looking for a permanent place to live.
In this article, we’ll look at the most widely-available California teacher home loans with no money down, some low-money-down alternatives and how to find them for even cheaper, down payment assistance that can make it easier to make the initial mortgage payment, and options for teachers who have bad credit.
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No matter what kind of mortgage you’re looking for, no matter what kind of income or credit requirements you need, there’s always a way to find an affordable house in the location you’re looking for.
California teacher home loans with NO money down
Saving up for a down payment is one of the most difficult parts of buying a home in California, especially if you’re on a teacher’s salary. There are only a few home loans in California that are available to teachers that truly require no money down whatsoever.
But if you’re not eligible for the following programs, don’t worry – we’ll discuss how to turn a low down payment loan into a NO down payment loan in the next section.
The best option for a California teacher home loan with no money down is the CalHERO mortgage. This is a California real estate reward savings program offered to first responders, veterans, and teachers who are buying a home within state lines.
CalHERO Mortgages have fairly low credit requirements (usually 580-620 minimum), are paid back over a 15 or 30 year fixed interest rate payment period, have no income limit in most cases, and can be used for purchasing OR refinancing a home.
And, yes, they often come with no down payment at all, although in some cases a down payment of 3.5 percent may be required, so it’s not a “sure thing” that you’ll be able to buy a CalHERO home without paying anything up front.
The only guaranteed no money down home loans for teachers in California are VA and CalVet mortgages. As you might be able to guess from the names, these home loans are sadly only available to teachers who have also served in the armed forces.
However, they have expanded eligibility requirements that will accept bad credit and low income, low interest rates that keep your monthly payments cheap, and no down payment requirement whatsoever.
CalVet loans usually end up costing a little less overall than federal VA loans, but either option will be very helpful to anyone who wants a California teacher home loan with no money down.
California teacher home loans with LOW money down
In most cases, you will have to put some money down on a home before you buy it. It helps lenders feel better about the risk of giving you money that they may not get back.
The greater the (perceived) risk of the loan, the higher the down payment, which is why many bad credit home loans or low income home loans have high down payments.
However, there are exceptions to the rule, which is why in this section we’ll highlight some California teacher home loans that anyone can take advantage of, no matter what their financial situation looks like.
Also: if you’re dead set on finding California teacher home loans with NO money down, most of the loans in this section can be manually underwritten by the lender to require no down payment.
This is usually done only if you have demonstrable proof that your credit or income isn’t your fault, or that you can afford the monthly payments and can’t afford the down payments.
If that’s the case for you, start talking to lenders in your area about manual underwriting today!
FHA home loans in California for teachers
FHA loans are our number one recommendation for California teachers looking for a home loan, especially if you’re buying a home for the first time.
FHA loans are one of the few mortgages on the market that have low credit requirements and very low down payments, both of which are combined with generous income requirements and low interest rates in most cases.
Here’s how credit works with an FHA loan. If you’re a California teacher with a credit score of 580 or higher, your down payment will be a mere 3.5 percent of the home’s overall value.
If you have a credit score between 500 and 579, you will need to provide alternative credit or make a 10 percent down payment. In any case, you’re likely saving a few thousand dollars up front.
USDA home loans in California for teachers
USDA loans are paid out by the US Department of Agriculture in order to convince American home buyers to move to rural areas. Admittedly, these loans are a little less useful in California than they are in other states, since most of our California readership probably lives in the big cities like LA and San Francisco.
However, these loans have low interest rates, expanded eligibility requirements, and fairly low down payments that can be underwritten even lower.
Down payment assistance for teachers in California
Down payment assistance can also turn a low down payment into no down payment (or, at least, into a down payment that you personally don’t have to pay.) The California Housing Finance Agency offers two different programs where the state will pay some of your down payment for you.
The first is called the MyHome Assistance Program, in which the CalHFA will pay up to 3.5 percent of the price of the home with a deferred zero-interest loan that you don’t have to pay off until your mortgage has ended.
As savvy readers have probably picked up on, if you get an FHA loan with a 3.5 percent down payment, this program means that you won’t have to put any money down at all when you buy your California home.
The second is the School Teacher and Employee Assistance Program. This program is special because it is only available to California teachers, as you no doubt guessed from the name. (Important note: this only applies to teachers in K-12 public schools, not private school, preschool, or university professors.)
If you’re eligible, the STEAP has much more lenient credit and income requirements than the MyHome program and pays up to 4 percent of the home’s value in down payments, so it’s one of the best ways to turn a loan with a down payment into a California teacher home loan with no money down.
Home loans for teachers with bad credit in California
If you have bad credit in California, looking for a home can be very frustrating because conventional mortgages usually require credit scores of somewhere around 640 to 700. But there are options.
The FHA and VA loans are going to be your two best bets for a mortgage. Both of these loans have good terms with very low credit requirements, and when combined with the School Teacher and Employee Assistance Program or some other down payment assistance, these loans will cost almost nothing up front.
If you’re not eligible for these programs, you can try to find someone to co-sign the mortgage with you. A co-signer is a close friend or family member who agrees to tie their credit score to the property.
In other words, the mortgage broker will consider their credit score in addition to yours when deciding to approve or reject a loan.
However, this can be a little risky for the co-signer, who will absorb some of the risk and may be expected to pay for you if you fail to make one of your monthly payments.
Make sure you and your co-signer both understand the risks and responsibilities involved before you sign the mortgage contract.
With these options in mind, you should have no trouble finding home loans for teachers with bad credit in California!
After reading this article, we hope you have gained a strong understanding of what California teacher home loans with no money down are available. We know that trying to buy a permanent home in this state can often be frustrating due to the high cost of living. And we know those frustrations only get worse when they’re compounded with a small teacher’s salary and bad credit. But with these resources and the help of intelligent counseling, we know you’ll be able to find the home of your dreams at an affordable price.