California City Offers $40,000 Interest-Free Down Payment Loan For First-Time Buyers

Even the most modest homes in Santa Ana, Calif., are on the market for half a million bucks, which prices out a large swath of potential buyers.

To combat this, HousingWire reports that the city now offers interest-free down payment loans for up to $40,000 for first-time buyers.

Santa Ana has a list of stipulations that people must meet in order to qualify. The purchase price cannot exceed $466,000 for an existing home and $560,000 for a new home (the median existing home price in Santa Ana was $745,200 at the end of last year). Borrowers need acceptable credit and must contribute 3 percent of the down payment from their own funds, as well.

The program is aimed at the less affluent. Household income must be 80 percent or less of the area median income, which works out to between a $50,600 limit on a one-person household and a $95,400 income on an eight-person household.

Read more