Fountain Valley Has $1,000,000, and They Want to Share it with You

If you’re a first time home buyer, looking to buy in Fountain Valley, you should know about the City’s first time home buyer program.

The City currently has $1,000,000 available for First Time Buyers who meet the City’s qualifications.

The City of Fountain Valley has a first time home buyer’s program under which it offers a forty-five year loan.  A qualified home buyer can obtain up to $50,000 for a one bedroom, $100,000 for a two bedroom and $150,000 for a home that is three or more bedrooms.  The loan is a second, secured by the home. Interest and payments on the loan are deferred for the first ten years.

The property must a be a single family, condo or town home located in Fountain Valley.  All code violations and/or health and safety deficiencies as well as any unpermitted improvements must be corrected prior to the funding of the loan.

All of this in addition to the First Time Home Buyers’ $8,000 Federal Tax Credit.


  • Income must be less than 120% of the median income for Orange County, based upon family size.
  • Must not have had ownership interest in a property in the last three years – unless qualified as a Displaced Homemaker.
  • Total household liquid assets after down payment and closing costs may not exceed $5,000 plus six months of housing expenses (principal, interest, tax and insurance) – retirement accounts are not included in the calculation.
  • Must have a credit rating with a minimum score of “Fair”.
  • Total down payment, including buyer’s down payment and Fountain Valley’s may not exceed 35% of purchase price.
  • Total housing expense including principal, interest, tax, insurance, homeowner’s dues and utilities must not be less than 28% nor more than 35% of gross monthly income.
  • Applicants must be legal residents of the United States.

2008 Income Limits

# of Persons in Household

Moderate Income Limit
1 $70,600
2 $80,700
3 $90,800
4 $100,900
5 $109,000
6 $117,000
7 $125,100
8 $133,200

Equity Share

Like Costa Mesa’s First Time Home Buyer Program, Fountain Valley has an equity share program.  

In addition to repayment of the principal amount, the buyer shall pay the City an amount equivalent to the percentage share of the appreciation the property has had.  These percentages are based upon the proportionate share of the City’s loan compared to the purchase price (ie. purchase price of $500,000. City gives a loan of $100,000.  The City has a 20% interest in any equity.  The buyer must pay the City 20% of any net gain in equity).


Equity Sharing Payment Forgiveness

The equity share owed to the city decreases over time.

Years 1-10 = Full equity share is owed.

Years 11-15 = 75% of equity share is owed.

Years 16-20 = 50% of equity share is owed.

Years 21-30 = 25% of equity share is owed.

Years 30-45 = 10% of equity share is owed.

After 45 years = 0% of equity share is owed.

If you would like to use this money to buy a home in Fountain Valley or information on other affordable housing programs in Orange County, please contact me at 714-319-9751 for assistance.


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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer:  All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied.  This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale.  Copyright © 2009 by Christine Donovan, All Rights Reserved. Costa Mesa Real Estate Minute March 28, 2009 – South Coast Costa Mesa Market Report.


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