New California loan program offers forgiveness to first-time homebuyers

It's a common gripe amongst baby boomers – that the younger generations aren't taking the plunge and buying more houses.

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Well, in a reflection of the times and in an effort to boost homeownership, California officials have announced a new program aimed to help encourage first-time homebuyers to take that step.

The program enables those making less than $120,000 a year in the state to be eligible for loans that would go towards buying a house.

The Forgivable Equity Builder Loan, created through the California Housing Finance Agency, offers loans of up to 10% of the purchase price of the home.

And the loan is forgivable, if the borrower continuously occupies the home as their primary residence for five years.

This new option could be a boon to first-time buyers struggling to land their first home. Many previously have had to make major sacrifices to pull it off.

"Buy a fixer-upper, move further away from family or friends, even those are willing to make longer commutes to work, if need be," said Greg McBride, Senior Vice President, Chief Financial Analyst at, a personal finance site.

According to McBride, homebuyers rarely regret buying their homes. "There's very little regret, just 18% of homeowners said they wouldn't buy the same home again," he said.

"That type of no regrets homeownership, I think would be homeowners should strive for," he said.

The requirements for obtaining such a loan, besides being a first-time homebuyer, include that the home must be a primary residence and buyers have to complete a class and obtain certification from the CalHFA.

The homes must be single-family, one-unit residences, including approved condominiums, although guest houses, granny units and in-law quarters might qualify too.

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