Are There Grants or Free Money Available to Help Buy a Home in California?

The short answer is yes — there are programs that provide money you do not have to pay back toward buying a home. But the real answer is more nuanced: eligibility is specific, funds are often limited, and understanding the difference between a grant, a deferred loan, and a forgivable loan matters before you plan around these programs.

What is a down payment assistance grant?

A true grant is money you receive to help with your down payment or closing costs that does not have to be repaid. Grants for homebuyers are typically funded by municipalities, counties, state housing agencies, federal programs like the Federal Home Loan Bank, and nonprofit or charitable organizations. Most target first-time homebuyers with low to moderate incomes.

Some programs require that you stay in the home for a defined period — if you sell or refinance early, a portion may need to be repaid. These are sometimes called soft seconds or forgivable loans rather than true grants.

What is available in California?

• CalHFA MyHome Assistance: A deferred second loan (not a grant, but no monthly payment required) providing up to 3% of the purchase price. Accrues 1% simple interest; due when you sell, refinance, or transfer title.
• Community Seconds programs: Approved subordinate financing from government agencies, nonprofits, or employers that can be combined with a conventional first mortgage up to 105% CLTV — potentially covering the entire down payment.
• Municipal and county programs: Many California cities and counties offer down payment assistance — sometimes as true grants, sometimes as forgivable loans after 5–15 years of occupancy. Availability and funding change frequently.
• Employer assistance programs: Some employers offer down payment assistance as a benefit. These must be established company programs documented through an award letter or legal agreement.

What conventional loan guidelines say about grants

Conventional loans allow down payment assistance from municipalities, quasi-governmental agencies, and charitable organizations. The DPA can be structured as a grant or subordinate loan. Key requirement: the source must be an eligible approved provider under agency guidelines — not a seller-funded gift dressed up as a grant.