CHDAP Loans for Sacramento Home Buyers

Buying a home in a seller’s market, especially in our Sacramento seller’s market is super tough. Which is worse, you think? Being a CHDAP buyer in a seller’s market or being a VA buyer in a seller’s market? Because no doubt about it, we are in a seller’s market in Sacramento. And the buyers who really get my empathy are those who are struggling with having to write offer after offer after offer, and getting none of those offers accepted.

Fortunately, the Elizabeth Weintraub Team members don’t experience much of this. We often find our buyers get a whopping edge in negotiations. We’re experienced, and that alone is a major factor. Sometimes, other listing agents advise their sellers to accept our offers because they know us. They know we will perform. If it’s a short sale, our buyers will wait for short sale approval. They are educated about the short sale process. Our buyers are prequalified and have the preapproval letter and proof of funds to show it.

But I hear from other agents whose buyers are not so lucky. One agent last month told me she had written 15 offers for her buyer. It was tough because her buyer was relying on an FHA loan. We accepted her offer; most sellers are sympathetic with FHA buyers because they once stood in those shoes. The CHDAP buyers, however, are relying on down payment assistance because, for whatever reason, they often don’t have enough money to buy a home. VA buyers are different story. They are not required to put any money down but it doesn’t mean they don’t have it.

CHDAP stands for California Homebuyer’s Downpayment Assistance Program. It helps first-time home buyers with the downpayment and / or closing costs. There are income limits. CHDAP loans take longer to close, often 45 days or more. In a short sale, many lenders expect to close 30 days from approval. Some short sale banks will not grant extensions. This makes buying a short sale extremely difficult for CHDAP buyers. Moreover, in a competing multiple-offer situation, a CHDAP buyer is very unlikely to win when pitted against a cash buyer.

I question whether CHDAP is the right choice for a first-time home buyer who wants to buy a short sale in Sacramento. It might be better, depending on the situation, for a home buyer to scrape up the downpayment, ask the short sale seller to pay their closing costs and be done with it.