Los Angeles continues to be one of the destination cities for people all over the world. The City of Angels features good weather all year round, an incredibly diverse community, and quick access to natural wonders and amazing sites. It’s easy to see why so many people dream of living in Los Angeles.
Los Angeles real estate can be intimidating on its own, but being a first-time home buyer comes with its own challenges that can be confusing for the uninformed. From finding the right home to actually closing on a deal, the process of buying your first home comes with many steps.
Read our guide to buying your first home in Los Angeles and how our local real estate offices and agents are here to assist you.
First-time homebuyer programs in Los AngelesOne of the biggest hurdles to buying a home specifically in the Los Angeles housing market, is the price tag. LA is consistently one of the most expensive cities in the country.
The good news for first-time buyers: you can easily find a payment assistance program at the federal, state, and local levels to help you cover down payments and closing costs, along with other forms of payment assistance. Some of these programs can even be stacked together.
Federal programsThe go-to federal program for first-time homebuyers is the FHA home loan. FHA loans are a type of mortgage that is insured by the Federal Housing Administration. Unlike traditional home loans, FHA loans allow for lower credit scores, and in some cases, FHA loans have lower monthly mortgage payments towards insurance. With a credit score of 580 or higher, your down payment can be as low as 3.5 percent. You can still qualify with credit scores lower than 580, but you may have to make a down payment of 10 percent or higher. FHA loans require mortgage insurance premiums, an additional and ongoing cost to your regular payments. This is designed to protect the lender should the borrower default on the loan.
VA loans are another common federal program. These loans are insured by the U.S. Department of Veterans Affairs and are offered to veterans, active service members, and surviving spouses. These loans can be highly generous, requiring no mortgage insurance or down payment. Lenders set their own minimum standards for income and credit scores, but these loans are fairly generous.
While they aren’t directly associated with federal programs, Fannie Mae and Freddie Mac are government-sanctioned companies that work with local mortgage lenders to provide conventional loans. These loans come with down payments as low as 3 percent.
California programsCalifornia has its own fair share of payment assistance programs for first-time homebuyers. The California Housing Finance Agency (CalHFA) offers programs to first-time homebuyers. You are considered a first-time buyer in California if you haven’t owned or occupied a home in the last three years. CalHFA’s programs offer assistance for down payments and closing costs for moderate- to low-income buyers. You must meet income requirements and have a credit score of at least 660, and you are required to take an approved homebuyer education course.
The two CalHFA programs are:
The Home Ownership Program is financed by funds from the U.S. Department of Housing and Urban Development. Designed specifically for low-income families, HOP can provide loans of up to 20 percent of a home’s purchase price for down payments and closing costs (not exceeding $75,000). However, this program is only available to unincorporated areas of LA County and cities that participate in the Community Development Block Grant Urban County Program. Applications for this program can be highly competitive as funding is often limited.
Los Angeles City programsFor the city of Los Angeles proper, the Housing and Community Investment Department (HCIDLA) has a few programs for first-time buyers.
Wondering what taxes do you pay when selling a house? We’re here to help.
Finding the right area
Finding a neighborhood that fits your budget and personal needs comes with its own difficulties, but it can be even more overwhelming in a city like Los Angeles. LA is generally considered an expensive area, and some neighborhoods naturally have a higher home price than others. For example, if you’re on a strict budget, you probably won’t buy your first home in Beverly Hills or Brentwood (two of the most consistently expensive neighborhoods in Los Angeles).
The good news is that the diversity of the community and the city’s constant growth mean that you can find safe and affordable housing that still features plenty of amenities. The Los Angeles housing market is constantly fluctuating, but some of the most affordable, safe neighborhoods include:
Find a real estate agent in LAReal estate agents can be your best tool in finding the perfect home in Los Angeles. Along with their general expertise on buying a home that meets your needs and budget while guiding you through the process, local real estate offices and agents have specific knowledge of the city. That can save you time and energy in finding the right neighborhood for your family to settle, and your agent can provide information about rules and regulations to be aware of and opportunities to take advantage of as a first-time buyer.
Berkshire Hathaway HomeServices California Properties has a team of highly skilled real estate agents with decades of experience. Our team can guide you through the complete process and provide you with the right tools, resources, and information to make the deal as smooth and hassle-free as possible.
When is the best time to buy? Contrary to popular belief, Los Angeles does have seasons. They are milder than in other parts of the country, but they are still noticeable. That goes for the house market, too. While you may not always have the choice to wait for a specific time of year, late spring tends to have the most home offerings. The number of homes on the market goes up between April and June. However, late summer is the best time to buy. Homeowners tend to cut prices around this time, and homebuyers become more active in finding a home before the school year starts in the fall.
You can still find good deals all year round, but if you want to save a few thousand dollars, it may be worth waiting until late summer or even the fall.
Finding your first home in Los Angeles comes with plenty of challenges. Our team of real estate agents at Berkshire Hathaway HomeServices California Properties can provide you with the right guidance to help you through the process. If you are looking for your dream home, contact us to get started.