New Hope for Californians

The state of California has announced a new program to help first time buyers buy and banks with REO's in certain areas sell those properties to the benefit of both groups. The California Housing Finance Agency has received a $200 Million allocation of bond funds for use in the Community Stabilization Home Loan Program. This will likely help between 800 and 1,000 Californians buy their first home.
It's only available for specific REO properties owned by one of the four following banks: Wells Fargo, HomeEq, CitiMortgage and Fannie Mae. All of these lenders have agreed to price the properties at 12% below market value.

The program also only applies to the following areas: the counties of Merced, San Joaquin, Riverside and Stanislaus. Also covered are certain specific Zip Codes in Alameda, Contra Costa, LA and San Bernardino counties. It will provide 30 year fixed rate loans at 5.5%, with no down payment. Borrowers must pay the expense of mortgage insurance. There are also certain income limits for borrowers. This can be found at links.sfgate.com/ZEGL .