County Of San Diego – First Time Home Buyer Programs – General info on how the programs work


We are the people you wish you knew when you bought your first home.  We are one of a very few companies that truly specialize in First Time Home Buyer Programs and Down Payment Assistance Programs.  In the past, you could only get information on our site for the areas we served (the Counties of San Diego and Riverside California).  We are in the process of changing our complete website to allow our site to be used to help buyers, their agents and lenders in all 50 states.  It is important to distinguish between “Information Provided” and “Areas Serviced”.  After we have completed the update to our site for the areas we service, we will allow for an interactive forum to allow information to be shared for all areas.

For now, lets take a moment to talk generalities.  What are First Time Home Buyer Programs (FTHB’s) and Downpayemnt Assistance Programs (DAP).

  • First Time Home Buyer Programs (FTHB).
    • Programs designed to help people who are FTHB’s buyer a home.  A FTHB is defined by the federal government as anyone who has not owned a home in the last 3 years.  In the process of applying for a FTHB program, your lender will require one additional year of taxes (3 years tax returns).  The lender verifies you are a FTHB by verifying that you have not claimed the Mortgage Interest Deduction on your taxes for the last 3 years.
      • Some programs will even allow people who are not classified as First Time Home-Buyers (who have owned a home in the last three years) to use the program if they buy in “Targeted Areas” which further the governments goals of rebuilding those areas.  For more information on these programs, call us at 877-696-7373 x 1 let us know that you are not a FTHB but want info on programs that can still help.
    • The FTHB’s are generally broken down into three categories
      • CRA (Community Reinvestment Act).
        • Banks are required to reinvest in the individual needs of the specific communities that they serve.  You can imagine that the needs of a community on Alaska would be very different than the needs of a community in Palm Desert.  It makes sense then that the needs of a High income community would be different from those of a low income or moderate income community.  The banks have a CRA file for each branch which details the programs that they have put into place for that community.  Failure to have a positive CRA file can have devastating effects on the bank when they apply to open a new branch or even buy/take over an existing bank.  Through the CRA programs banks offer to low and moderate income buyers mortgages with lower interest rates, reduced costs and sometimes lower/no down payment and reduced PMI costs.
      • Grants and Silent Seconds.  Grants and silent seconds are used primarily in two ways.  It might be good to give a better understanding of what a Silent Second is.  Let’s say that you wanted to buyer an house but were not only short on cash, you were having a hard time affording the payment.  So you turned to the most trusted of all sources, your parents.  You asked them to lend you 60,000 dollars so that you had a Down Payment and also so the payment would be low enough that you could afford it.  You didn’t want them to feel as if you were taking advantage, so you offer to pay for example 3% simple interest on the loan.  You agreed that when you moved out, refinanced or sold the house, you would give them back the money with the interest.  In return, you did not have to make any payments on the borrowed money until then.  In reality, this happens all of the time.  But there is one problem with this arrangement.  not everyone parents have 60,000 to lend to their kids.  Thus we have silent seconds.  You borrow the money, with no expectation by them for you to make any monthly payments. Usually they are at ridiculously low interest rates (about 3% simple interest).  Some times they are forgiven if you live in the house for a certain amount of time (like 15 Years), other times you must pay them back in all cases when you move, refinance or sell.  To see how a silent second can help you afford a home use the True Mortgage Calculator.
        • DAP’s (Down Payment Assistance and or).  Down Payment Assistance can be used to cover most of the minimum required down payment for a FHA loan.  Some DAP’s are even big enough to cover the cost of a conforming loan (20% of the purchase price).  Usually (but not always) the DAP program that the buyer put some money in though.  For example.  the buyer wants to use a FHA loan to buy a 300,000 house.  FHA requires that the buyer put 3.5% down (10,500).  The buyer gets a DAP program that allows them up to 20% in Down Payment Assistance (60,000).  Because the 60,000 more than covers the 10,500 that FHA required, the FHA down Payment requirement is met.  But if the DAP program then requires that the buyer puts in 1% of his own money, then they buyer would need 3,000 in down payment.  There are federal laws that dictate where the buyer may get his down payment from.  Fot the most part he must use his own money, or get a gift from a Family member or non profit like a church or one of these federal programs.  The seller can never contribute to the down payment for the buyer
        • Closing Cost Assistance.  Here again the buyer is receiving funds to help with finds need to close the transaction.  in this case the program has specified that the funds can only be used to cover closing costs.  Closing costs are a separate cost from the down payment.  Closing costs are the cost the buyers must pay for certain services that they need to use to buy the house.  Some examples of closing costs would be Loan fees, title fees, escrow fees, appraisal fees, etc.  they generally add up to 2 to 4% of the purchase price.  Unlike the down payment, the seller is permitted to pay closing costs on behalf of the buyer.  Most conforming loans allow up to 3% and FHA allows up to 6% of the purchase price.
        • Down Payment Closing Cost Assistance  Sometimes the program will let the buyers deside how to use the funds.  They can use them towards the Down Payment and Or the closing costs.  Here the buyer must use some statogy.  If they are getting a small DCCA type program that only allows them 3% in costs, then they would want to ask the seller to pay most if not all of their closing costs and use the 3% in program funds to go towards the FHA 3.5% minimum down payment.  Now the buyer only has to come up with .5% down payment!
      • Payment Assistance.
        •  There are many programs out there that help the buyer to reduce their payments without providing grants or silent seconds.  We have already talked about CRA, and there are others to.  An example would be MCC (Mortgage Credit Certificate.  Generally if a buyer is approved for a MCC they will get a 15% 0r 20% non refundable tax credit at the end of the year.  The MCC gives the buyer a certificate that allows the buyer to change their withholding at their job and claim the tax benefit every month through an increase in their bring home pay.  The underwriters will usually add this income directly to the amount that the buyer can afford on his PITI (monthly payment).  So the buyer got two benefits.  (1) He gets a credit to use towards his new monthly mortgage payment.  (2) he usually qualifies for a more expensive house.  For an example of how the GREAT program works, run a scenario on the True Mortgage Calculator.


FTHB’s and DAP’s very not only by complexity, but on benefit.  There is a reason that it has been nearly impossible for you to find out any information on these programs.  Like in most things, it all has to do with money.  Lenders and Real Estate Agents get paid a percentage of the sale in commission.  Here are some things to consider.  Is it not unreasonable that most people would spend time and money learning how to be successful at the transactions that bring them the most money?  And when you think about it, First Time Home buyers are not where the money is.

    • They are the most complex of any residential transactions.
    • The City has its own programs, the unincorporated areas of the county has its own programs, each Incorporated City has its own programs, the State and Federal government have their own programs and the banks have their own CRA programs.
    • They are the hardest type of transaction to get accepted by the seller and listing agent.  This makes sense, with so many transactions like these being attempted by novices, they have a very high failure rate.  The Listing Agent will be very skeptical of the offer, and your Real Estate Agent must be able to put the Listing Agent at ease about your teams chances at successfully completing escrow.  It is not unreasonable for the listing agents to be skeptical.  After all, their fiduciary responsibility lies with the seller.  It will be the buyers agents job to demonstrate that both s/he and the lender have a firm grasp on the intricacies of the programs that buyer has stated that they are using to buy the home.
    • The lenders do 200% to 600% more work an more complicated loans and get paid less than what they would have had they not done them.  Here is why.  You approach a lender and he qualifies you for 300,000.  You buy a home and he gets paid a commission based on 300,000.  Now you ask the same lender to do a CHDAP (3% DAP), a DCCA (35,000 – 70,000 DAP), a Cal Homes for 20,000 (also a DAP) and perhaps an MCC..  Now the lender is doing 5 program applications instead of 1, and they are more complicate.  But he is going to get paid on your new lower 200,000 loan balance instead of the original 300,000 balance.  This means he did 500% more work and got paid 33% less money!  Faced with this, many times the lenders will “find” what seems like compelling reasons for the buyer not to do the programs.  Many time the buyers are told that there are “no funds” left in the program.  Sometimes the lenders will mislead the buyers about the benefits or restrictions on the programs.  More often than not the lenders truly don’t even know enough about the programs to talk with any authority.  And to make matters even worse, many programs require them to be on a “approved list of lenders”.  So when the buyers ask them for information, the lenders are placed in a bad position.  They can lie to the client and convince the client that they do not really want to use the programs, or they can lie to the client and tell them that they are an expert and in an effort to not loose a commission they take on a transaction which they truly are not qualified to do.  as you read this you may find yourself getting a little mad, but don’t.  Let’s be honest here.  Most of the time the buyer has chosen their Real Estate Agent and Lender because they are a family member or friend.  For the last five years this relative/friend has never mentioned anything about these programs to the buyer.  The buyer went out and through great effort tracked down the information on the programs themselves.  The buyer now knows that the programs are extremely tough to get through, but provide tremendous benefit.  The buyer goes back to the relative/friend and asks them if they have ever heard of the programs and if they can help.  Let’s stop here for a moment.  If the relative/friend truly new about these programs (and wanted to spend the time and money to learn and specialize in them), they would have told the buyer about them 5 years ago.  The bottom line is that they are not qualified to do the transaction and the buyer knows it.  They are just bending to that sense of obligation that we in real estate place on our friends and family to always use us.  Think of it this way.  If they really did know about these programs, who many other friends and family members do y0u have that used this person and even knowing that these programs would have saved them many hundreds of dollars per month, he never mentioned to programs to any of them.  If you find yourself in this situation, and you go to your family member/friend and ask them “Can you do this”?  What you really are saying is “Do you want to turn a possible paycheck down”.  Don’t be mad if they say “Yes. How hard could it be'”.  In the end, it comes down to common sense.  If it was easy, all your friends would already have done it.  Hire a professional real estate agent and a professional lender that has successfully completed no less than 20 of these types of transaction.  That doesn’t seem to much to expect of someone who is indicating that they are a professional in the field of First Time Home Buyer and their associated programs.


It is the buyer who looses when mistakes are made.  When a transaction fails they can loose

    • Appraisal fees
    • Home Inspection fees
    • Their Ernest Money Deposit
    •  The home of their dreams
    • More

It is the buyer who is ultimately responsible for assembling a team that compliments his goal of success.  The first step in the process is to educate yourself one what is out there and if you qualify.  Feel free to review all of the information on this website with no obligation.  This will help you to understand what is available.  Your next step will be to see if you qualify by scheduling a First Time Home Buyer Consultation.  For now, use the table below to find out what programs are available in the areas that you want to live.  Good Luck and HAVE FUN!

Currently Gardnier Inc provides information on First Time Home Buyer Down-payment Assistance Programs for the following Counties In California

    • San Diego (you are here)
    • Riverside
    • Orange (coming this year)

Your next step is to start looking for programs that are available for the area that you want to live.  We recommend that you “Search For Down-Payment Assistance Programs By City” (In the future you can access this link directly from the menu).

Whether you are a First Time Home Buyer or have purchased many homes, make sure to visit our True Mortgage Calculator as it is the only calculator anywhere on the web that allows you to calculate a complete payment including all charges!  It took over 9 months of programing to complete this calculator, so if you want to see what your real payment will be, use the True Mortgage Calculator

If you want information on programs in other cities, call us at 877-696-7373 x777 or email your request to