How would Covina's first-time homebuyer down payment loan work?

If you’re hoping to buy your first home in Covina, the proposed down payment loan could help, but applications aren’t open yet. On October 22, 2026, the City of Covina released a Request for Qualifications to hire an outside administrator. Submissions are due November 30, 2026.

The attached guidelines are proposed and may change. As of October 27, 2026, no application period has been announced.

What has Covina announced?

Covina has announced a search for a program administrator, with proposed buyer guidelines attached to that request. The City expects to fund about 21 households.

The City’s October 22 news post directs readers to its Bids and RFPs page. That deadline is for administrator submissions, not homebuyer applications.

The Request for Qualifications and attached guidelines say the selected consultant will work with staff to review, refine and finalize program materials.

The administrator, opening date and lottery date remain unknown. No maximum purchase price is stated, and the documents don’t explain whether the assistance amount would depend on need.

How much assistance is proposed?

The proposed program would offer deferred-payment, no-interest loans of up to $40,000 for down payment and eligible closing costs.

Eligible purchases would include a new or existing single-family residence, condominium or townhome inside Covina city limits. The loan would be secured by a deed of trust recorded against the property, behind the first mortgage. No monthly loan payments would be required.

Funding comes from the City’s Permanent Local Housing Allocation funds through the Los Angeles County program. Cycle 1 has $1.09 million allocated.

Funds must be spent by June 30, 2029. The request says spending the full allocation by December 31, 2027 is desired; neither date establishes when buyers could apply.

When would the loan need to be repaid?

Under the proposed terms, repayment would be deferred until a repayment event, with forgiveness available after the full 45-year term.

The loan would carry no interest while the borrower complies with program requirements. Repayment events would include sale, transfer, rental, non-owner occupancy or cash-out refinancing. Only if an event makes the loan due before the 45-year term ends would the principal be due together with simple interest at an annual rate of $1.50 per $100 of the loan balance.

Refinancing for a lower interest rate or shorter loan term may be permitted without triggering repayment, subject to program requirements.

The home would need to remain the owner’s principal residence throughout the 45-year term. Annual documentation may be requested. Forgiveness would apply to the outstanding balance after the full term if the borrower remains in compliance with all program requirements.

Who could qualify under the draft?

The proposed rules call for first-time buyer status, household income within the published limits, qualifying credit and a fixed-rate first mortgage.

The draft defines a first-time buyer as someone with no ownership interest in, and who has not held title to, residential property. The guidelines list a few exceptions.

You would need pre-qualification from a local lender. Co-signers and variable-rate loans would not qualify. All applicants would need a credit score of at least 600, and at least one applicant would need a score above 720.

The income limits below are effective September 2026 and subject to annual change. Income includes all household members living at the home, including income from assets.

The buyer’s own down payment would need to be at least $2 of every $100 of the purchase price. An 8-hour first-time homebuyer course, online or from a HUD-approved organization, would need to be completed before escrow closes, with proof before funding.

City employees, officials, consultants and others involved in the program, and their household members, would be ineligible under the conflict-of-interest rules.

How would selection and closing work?

The proposed process starts with a pre-application period, followed by an eligibility review and randomized lottery.

The City would announce funding availability and establish the pre-application period. Late pre-applications would not be accepted. Pre-qualified applicants would receive lottery numbers by draw order, and selected applicants would then submit full applications with lender documents.

Applicants would schedule a review of the property by City staff to determine whether there are any Building Code or Health and Safety Code violations. Before opening escrow, final re-certification would call for the most current three pay stubs, three bank statements, and federal and state income tax forms.

Requested missing documents would have a 10 calendar day response window. After that, an application may be deemed incomplete and the applicant may be disqualified.

Conditional approval would lead to signing the Loan Agreement, Promissory Note, Deed of Trust and Affordability Covenant. The applicant, lender, escrow officer or real estate agent would need to notify the City of the expected closing date at least 10 business days before closing. Late notice may delay funding or closing.

What would these rules mean for a purchase?

If adopted, the proposed rules would make assistance depend on selection, final eligibility and the property’s review, even after a buyer meets the initial qualifications.

L. had almost reached her savings target when she heard Covina was setting up a first-time homebuyer down payment loan. She immediately began recalculating what she might be able to purchase. The difficult part was that the program being discussed was not necessarily money she could apply for that day. We went back to her original budget and treated the possible assistance as a future option until the city released eligibility rules and an application process. That kept a promising program from becoming an assumption in her offer plan.

If you’re buying a condominium or townhome, read the HOA disclosure guide for help understanding HOA documents. The draft doesn’t state whether other assistance programs could be combined with this loan.

What can you do while applications are pending?

You can watch the City news page, line up local lender pre-qualification for a fixed-rate loan and take the education course early.

Keep pay stubs and bank statements available. Ask the Community Development Department at 125 East College Street, through City Hall at (626) 384-5400, about application dates, the administrator and any purchase price limit.

For separate purchase questions, read the guides to California supplemental property tax bills and the homeowners’ exemption claim. The proposed program documents don’t address property tax.

This guide is educational, not legal or tax advice.

The short version

Covina’s proposed loan could provide up to $40,000, but no buyer application period has been announced as of October 27, 2026.

The draft includes income and credit rules, a lottery, no monthly payments and forgiveness after the full 45-year term with continued compliance. Earlier repayment events would bring principal and simple interest due. Check the finalized terms when the City publishes them.

To see what homes like the one you want are worth, try the home value tool.