First-time homebuyer programs in Palo Alto

Public down payment programs exist to help first-time buyers into homeownership. In Palo Alto they run into a simple problem: price. Most programs require a first mortgage that fits under conforming loan limits. The city's median single-family home sells for several times that ceiling. That does not make the programs useless here. It means they work mainly for condos, townhomes and deed-restricted homes rather than for detached houses.

This page explains the programs a Palo Alto buyer is most likely to hear about, as their sponsors described them in 2026. It also notes which ones were open. It is general information, not financial or legal advice. Program rules, rates and funding change often. Confirm everything with the program itself and a lender approved to offer it. For the overall purchase process, see our guide to buying a home.

Start with the price limits

Two limits decide whether a program can help with a given home.

• Loan limits. The Federal Housing Finance Agency set the 2026 conforming loan limit at $832,750 nationally, rising to $1,249,125 in high-cost areas. Santa Clara County sits at that ceiling. Loans above it are jumbo loans, which most assistance programs do not pair with.
• Income limits. Most programs cap household income, usually tied to the county's area median income. Santa Clara County's limits are among the highest in the state, so many professional households still qualify for some programs.

Compare those limits with the market. The Almanac, using MLSListings data, reported a median single-family sale price of $3.8 million in Palo Alto for most of 2025. Even with 20 percent down, a loan on a typical house would be far above the conforming ceiling. Condos and townhomes are a different story. Our condo and townhome guide explains that market. Our mortgage basics page covers jumbo loans.

CalHFA MyHome Assistance

The California Housing Finance Agency (CalHFA) is the state's affordable housing lender. It does not lend directly to the public. Buyers work through CalHFA-approved lenders.

According to CalHFA's MyHome page, the program is a deferred-payment junior loan for down payment or closing costs:

"Deferred" means no monthly payment on the junior loan while you keep the first mortgage. It is repaid when you sell, refinance or pay off the first loan. MyHome has its own borrower and property requirements, income limits and a homebuyer education requirement. Because it must sit behind a CalHFA first mortgage, the total loan has to fit under CalHFA's loan limits. In Palo Alto that points to condos, townhomes and BMR homes.

CalHFA Dream For All

Dream For All is a shared appreciation loan. Instead of interest, the buyer repays the original amount plus a share of the home's increase in value when the home is sold or the loan is paid off. CalHFA's Dream For All page lists assistance of up to 20 percent for down payment or closing costs, not to exceed $150,000.

In a January 16, 2026 announcement, CalHFA said it expected to make $150 million to $200 million available for 2026. Key points from that release:

• Applications opened February 24 and closed March 16, 2026.
• Applicants were chosen by random selection. Selected buyers had 90 days to shop for a home.
• Assistance is for first-generation homebuyers who meet income limits. CalHFA gave the Santa Clara County limit as about $309,000.
• Applicants needed a pre-approval letter from a CalHFA-approved lender before applying.

CalHFA's page said in May 2026 that the next round of vouchers had been released and that the portal was closed to new applications. Watch the page for any future round. The $150,000 cap shows the limits of the program here. On a $1 million condo it would cover 15 percent, not 20.

Santa Clara County: Empower Homebuyers SCC

Empower Homebuyers SCC was the county's down payment loan for first-time buyers with low to moderate incomes, funded through the 2016 Measure A housing bond and run by Housing Trust Silicon Valley. Its program page described loans of up to 17 percent of the purchase price.

When we checked in November 2026, the page said the program was fully subscribed and that it sunsets June 30, 2026. It was not taking new applicants. Housing Trust Silicon Valley invited buyers to join an interest list for future homeownership programs. Older articles that describe purchase price caps and income limits for Empower are out of date. Do not plan around them.

Palo Alto's BMR purchase program

The city's own route into ownership is its Below Market Rate (BMR) program. It sells condominiums and townhouses, created mostly through inclusionary rules on new development, at prices well below market. Alta Housing BMR Services administers it for the city.

• Status. Alta Housing's purchase program page said the waiting list was closed as of June 2026.
• Joining. When open, there is no income or asset test to join the list. Applicants must renew each July to stay on it.
• Eligibility. Income and asset limits are set for each home by formula, based on its price, taxes, insurance, dues and loan rates. They are checked at the time of purchase.
• Preference. People who live or work in Palo Alto get a preference.
• Restrictions. Homes must be owner-occupied. Resale prices are restricted and the city has a right of first refusal.

BMR homes build less equity than market-rate homes, but they offer stable costs in a city where those are rare. Our below market rate guide covers the program in detail.

Other help worth asking about

• Employer programs. Some large employers, including Stanford for eligible faculty and staff, run their own housing assistance. Ask your human resources office what applies to you.
• Lender programs. Some banks and credit unions offer their own first-time buyer grants or reduced fees. Terms vary and some are limited to certain census tracts.
• Neighboring cities. Mountain View, Menlo Park and East Palo Alto run their own BMR ownership programs with separate lists.
• Housing counseling. Homebuyer education is required by many programs. Approved courses also explain credit, budgeting and closing costs.

A practical order of steps

1. Decide what you are shopping for: condo, townhome, BMR home or house. That choice decides which programs can apply.
2. Find a lender approved by CalHFA and familiar with deed-restricted loans if you are considering BMR homes.
3. Get pre-approved and ask the lender to run each program against your income and target price.
4. Take an approved homebuyer education course early. Certificates are often required before closing.
5. Join every waiting or interest list that fits. Keep your contact details current.
6. Read the repayment terms. Deferred and shared appreciation loans come due when you sell or refinance.

If you are renting in the meantime

Many first-time buyers rent in Palo Alto or nearby while they save and wait for a list to open. Our rent prices page shows what renters pay. Saving while renting is easier when you know your rights on deposits and increases. Our renting guide covers them. Buyers who are open to neighboring towns can also look at our nearby towns hub, since condo prices and programs differ from city to city.

Frequently asked questions