Kathy:

My husband and I have been trying to save for quite some time for a 20 percent down payment and it seems to be taking forever. I am a school teacher and he is a police officer and we have one 2-year-old and another child on the way. I keep hearing it is a great time to buy and interest rates may go up. How can we take advantage of the market without our full 20 percent down payment?

—Missy B.

Hi Missy:

You know I will always say that it is a great time to buy real estate because in order to see any benefits of home ownership, you have to be in the game. Even if prices are higher than you would like to pay, I recommend starting out with something smaller just so that you can start as soon as possible with owning your own home. Of course, everyone’s situation is different.

You, however, have a few great things going for you as far as you and your husband’s professions. There are many down payment assistance programs out there for teachers, law enforcement, first responders, etc. These programs were put in place to help or give back to those that sacrifice their time to educate, serve, and protect our community.

There are a few options for you to consider. First, there are loan programs such as an Federal Housing Administration (FHA) loan, that have looser guidelines for qualifying and you can have a down payment as low as 3.5 percent of the purchase price versus the traditional conventional financing of 20 percent down. You may be able to come out of pocket with less money, but you will have to pay a price for this as you will be considered more of a high-risk borrower and will have to pay what is called a mortgage insurance premium that will be added to your monthly mortgage payment. Putting less money down will mean your payment will be higher. Depending on your income and qualification, if you can afford the higher monthly payment, you can at least purchase with less of a down payment.

Another option to look into is asking your lender about programs that are available for first-time homebuyers that are offered through the Department of Housing and Urban Development based on your profession. Teachers and law enforcement often qualify for down payment assistance programs.

CalHFA Buyer Assisted Loans, if you qualify, render you eligible for down payment assistance and closing costs. There is also an Extra Credit Teacher Home Purchase Program available to teachers, administrators, school district employees and staff members. This program offers between $7,500 and $15,000 in down payment assistance for first-time homebuyers. California homebuyers can use CalHFA down payment assistance programs for a purchase price of up to $660,000.

The other two programs to check out are MyHome Assistance Program and the School Teacher and Employee Assistance Program (STEAP).

In the MyHome Assistance Program, 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.

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 STEAP. This program is special because it is only available to California public school teachers.

There are certain guidelines and income limitations to qualify for most of these programs and you may be required to complete a course with an eligible homebuyer counseling organization. Make sure you check with a CalHFA-approved loan officer. CalHFA is not a direct lender, rather their programs are offered through private loan officers who have been approved and educated through the agency.

You mentioned your husband is in law enforcement and there is the CalHero program. Another program meant to give back to or aide those who sacrifice for us, CalHero mortgages have fairly low credit requirements and they are paid back over 15- or 30-year fixed interest rate periods. And, in many cases have no income limits and can be used for purchasing or refinancing an existing home. In some cases, there is no down payment at all.

I think you are in a great spot to purchase depending on your income and credit scores. Speak to a qualified loan officer to get all your questions answered and to take advantage of all the assistance that you can.

—Kathy McSherry is a Realtor at Coldwell Banker Residential Brokerage. Email your questions to [email protected], or call 702-328-9905.