CALHFA LOANS

CalHFA Loans are a popular choice for homebuyers in California. The California Housing Finance Agency, or CalHFA for short, provides various loan programs to assist low to moderate-income families and individuals in purchasing their first home. CalHFA Loans offer several benefits, including lower interest rates, mortgage insurance premiums, and down payment and closing cost assistance. The loans also offer more flexibility with the source of down payment funds, allowing borrowers to use gifts, grants, or loans. Additionally, CalHFA Loans have specialized programs for teachers, veterans, and those purchasing in designated high-cost areas. With a variety of loan options available, CalHFA Loans make homeownership more accessible for Californians and serve as a helpful resource for those looking to take their first step towards owning their own home.

CalHFA Loan Overview

CalHFA Loans are a popular option for homebuyers in California. The California Housing Finance Agency (CalHFA) provides various loan programs to assist low to moderate-income families and individuals in purchasing their first home. These loans offer several benefits, including lower interest rates, mortgage insurance premiums, and down payment and closing cost assistance. CalHFA Loans offer more flexibility with the source of down payment funds, allowing borrowers to use gifts, grants, or loans.

CalHFA Loans have specialized programs for teachers, veterans, and those purchasing in designated high-cost areas. The Extra Credit Teacher Home Purchase Program provides teachers, administrators, and other school employees with a deferred-payment junior loan of up to $15,000. The CalHFA VA Loan Program offers flexible credit requirements for eligible veterans, active-duty personnel, and surviving spouses.

CalHFA Loans can also help those purchasing in designated high-cost areas. The California Homebuyer’s Downpayment Assistance Program (CHDAP) provides deferred-payment junior loans of up to 3% of the purchase price or appraised value, whichever is less. The MyHome Assistance Program offers a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value. With a variety of loan options available, CalHFA Loans make homeownership more accessible for Californians and serve as a helpful resource for those looking to take their first step towards owning their own home.

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How to Qualify for a CalHFA Loan

Pre-approval is the first and most important step towards acquiring your CalHFA Loan. Whether you’re a first-time home buyer or seeking to refinance your current home, getting pre-approved helps narrow your focus to properties that fit your budget, establish credibility with sellers, and expedites both the loan funding and closing process.

Requirements for First-Time Home Buyers:

A first-time homebuyer in California may benefit from a CalHFA loan due to the program’s lower interest rates, down payment assistance, and flexible credit requirements. CalHFA loans can also provide specialized programs for teachers, veterans, and those purchasing in high-cost areas, making homeownership more accessible for Californians.

- Income Eligibility: To be approved for a CalHFA loan, first-time homebuyers must meet the income requirements set by the program. The income limits vary depending on the county in which the home is located and the number of people in the household.
- Credit Score: A credit score is an important factor in determining whether a borrower will be approved for a CalHFA loan. CalHFA requires a minimum credit score of 660 for most of its loan programs.
- Debt-to-Income Ratio: The debt-to-income (DTI) ratio is another key factor in determining loan eligibility. CalHFA generally requires a DTI ratio of 43% or less.
- Homebuyer Education: CalHFA requires first-time homebuyers to complete a homebuyer education course prior to closing on the loan. The course covers topics such as budgeting, credit management, and the home buying process.
- Property Requirements: CalHFA loans require that the property being purchased meets certain standards for health and safety. The property must also be the borrower’s primary residence.
- Employment History: CalHFA may require borrowers to have a stable employment history, typically for the past two years, to be eligible for a loan.
- Down Payment: Depending on the CalHFA loan program, borrowers may be required to contribute a minimum amount towards the down payment, ranging from 0% to 3.5% of the purchase price.
- Residency: CalHFA loans are only available to California residents who are purchasing a home in California.

Requirements for Refinancing to a CalHFA Loan:

A homeowner in California may benefit from a CalHFA refinance loan due to its potentially lower interest rates, reduced mortgage insurance premiums, and down payment assistance programs. Refinancing into a CalHFA loan can help homeowners save money on their monthly mortgage payments and overall loan costs.

- Current Mortgage: To be eligible for a CalHFA refinance loan, the borrower must have a current mortgage on the property that meets certain requirements, such as being a conventional or FHA-insured loan.
- Loan-to-Value Ratio: The loan-to-value (LTV) ratio is the amount of the new loan compared to the appraised value of the property. CalHFA typically requires an LTV ratio of 97.75% or less for its refinance loans.
- Credit Score: CalHFA requires a minimum credit score of 660 for most of its refinance loan programs.
- Employment History: Similar to CalHFA’s requirements for first-time homebuyers, borrowers may be required to have a stable employment history for the past two years.
- Residency: CalHFA refinance loans are only available to California residents who are refinancing a property in California.
- Homebuyer Education: CalHFA may require borrowers to complete a homebuyer education course prior to closing on the refinance loan.

TYPES OF CalHFA Loans

CalHFA Conventional Loan

This is a standard 30-year fixed-rate mortgage loan that follows Fannie Mae and Freddie Mac guidelines, with down payment assistance options available for eligible borrowers.

CalPLUS FHA Loan

This is an FHA-insured loan with a 30-year fixed interest rate and a grant for down payment assistance and closing costs. Borrowers must meet certain income and credit requirements to be eligible.

CalHFA VA Loan

This is a VA-guaranteed loan with a 30-year fixed interest rate and no down payment requirement for eligible veterans and active-duty military personnel.

CalHFA USDA Loan

This is a USDA-guaranteed loan with a 30-year fixed interest rate and no down payment requirement for eligible borrowers in designated rural areas.

CalHFA School Teacher and Employee Assistance Program

This is a deferred-payment, low-interest loan program for California public school employees who are first-time homebuyers.

CalHFA MyHome Assistance Program (MyHome)

This is a deferred-payment junior loan that can be used for down payment or closing cost assistance on a CalHFA first mortgage loan.

It’s important to find the right type of loan that fits your unique financial situation. Contact one of PRMG’s home mortgage experts today! We’ve been serving customers just like you for over 22 years. Your mortgage expert’s guidance can help you make an informed decision and secure your CalHFA Loan.

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Pros of securing a CalHFA Loan

Lower Interest Rates: CalHFA offers competitive interest rates on its loan programs, which can potentially save borrowers thousands of dollars over the life of their loan.
Down Payment Assistance: Many CalHFA loan programs offer down payment assistance to eligible borrowers, which can help reduce the upfront costs of buying a home.
Reduced Mortgage Insurance: CalHFA loans also come with reduced mortgage insurance premiums, which can lower the monthly mortgage payment for borrowers.
Homebuyer Education: CalHFA requires borrowers to complete a homebuyer education course, which can help prepare them for the home buying process and improve their chances of long-term success as a homeowner.
Refinancing Options: CalHFA also offers refinancing options for eligible homeowners, which can help them save money on their monthly mortgage payments and overall loan costs.
Non-Traditional Credit Consideration: CalHFA also considers non-traditional credit sources for borrowers who may not have a traditional credit history, making it easier for more people to qualify for a loan.

Cons of securing a CalHFA Loan

Income Limits: Many CalHFA loan programs have income limits, which means that borrowers may not qualify if their income exceeds a certain threshold.
Property Eligibility Requirements: CalHFA also has property eligibility requirements, which means that not all homes may be eligible for CalHFA financing.
Limits on Loan Amounts: CalHFA has maximum loan limits, which means that borrowers may not be able to finance a home that exceeds a certain price point.
Mortgage Insurance: While CalHFA offers reduced mortgage insurance premiums, borrowers may still be required to pay mortgage insurance, which can increase their overall loan costs.
Application and Eligibility Requirements: CalHFA loan programs have specific application and eligibility requirements, which may be more stringent than traditional loan programs.
Potential Delays in Closing: Because of the additional documentation and requirements for CalHFA loans, the closing process may take longer than traditional loan programs.

FAQS ABOUT CalHFA Loans

What is CalHFA Loan?

CalHFA stands for California Housing Finance Agency. It is a state agency that provides affordable housing options to California residents.

What types of loans does CalHFA offer?

CalHFA offers a variety of loan programs, including conventional, FHA, VA, and USDA loans.

Who is eligible for a CalHFA loan?

Eligibility requirements vary by loan program, but generally, CalHFA loans are designed for first-time homebuyers and low to moderate-income borrowers.

What are the income limits for CalHFA loans?

Income limits vary by loan program and location. Borrowers should check with CalHFA or a licensed mortgage broker to determine income limits for specific loan programs.

Can I use a CalHFA loan to purchase a home outside of California?

No, CalHFA loans are only available to California residents purchasing homes in California.

Do I need to be a first-time homebuyer to qualify for a CalHFA loan?

No, some CalHFA loan programs are available to repeat homebuyers as well.

What is the interest rate on CalHFA loans?

Interest rates for CalHFA loans vary based on the loan program and current market conditions. Borrowers should check with CalHFA or a licensed mortgage broker to determine current interest rates.

Can I refinance my current mortgage with a CalHFA loan?

Yes, CalHFA offers refinancing options for eligible borrowers.

Are there any fees associated with CalHFA loans?

Yes, CalHFA loans may have origination fees and other closing costs. Borrowers should carefully review loan documents and disclosures to understand all associated fees.

SECURING YOUR CalHFA LOAN HAS NEVER BEEN EASIER!

Whether you are a first-time homebuyer or are looking to refinance your existing mortgage, PRMG’s Home Mortgage Experts can provide you with the information and resources you need to make an informed decision about your financial future. We pride ourselves on our commitment to customer service and will work tirelessly to ensure that you receive the best possible experience.

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