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CalHFA Homeownership Programs Divison

The CalHFA Homeownership Programs Divison provides affordable housing opportunities by offering below-market interest rate mortgage loans to very low-to-moderate income first-time homebuyers. The Program strives to achieve availability of mortgage funds 365 days a year, an equitable geographic distribution of its loans throughout the state, and an equal balance between newly constructed and resale homes. There are several unique features and programs offered which may fit the need of the prospective buyer.

CalHFA establishes partnerships with lenders, local housing agencies, builder/developers, real estate professionals, and other intermediaries in order to develop and deliver its programs. This collaborative approach helps expand homeownership opportunities by maximizing the collective financial resources available to borrowers.

The Homeownership Programs division offers information on:


  • Programs (CalHFA and Prop. 46 Programs)

Mortgage Loan Programs:

  • Homeownership Mortgage Loan Program
  • Builder-Lock (BLOCK) Program
  • Energy Efficient Mortgages
  • HomeChoice Program Information
  • Mortgage Insurance
  • Partnership with Southern California Home Financing Authority (SCHFA)
  • Self-Help Builder Assistance Program
  • Single Loan (SL) Process

Down Payment Assistance Programs:

  • Affordable Housing Partnership Program (AHPP)
  • California Homebuyer’s Downpayment Assistance Program (CHDAP)
  • CalHFA Housing Assistance Program (CHAP)
  • Extra Credit Teacher Home Purchase Program (ECTP)
  • High Cost Area Home Purchase Assistance Program (HiCAP)
  • Homeownership In Revitalization Areas Program (HIRAP)
  • Oakland Teacher Program
  • School Facility Fee Down Payment Assistance Program (SFF)

If you are interested in a partnership with the Homeownership Division, call 916.324.8088, 800.789.2432 or visit their website www.calhfa.ca.gov.


Choosing The Right Loan

Help For First Time Home Buyers
There are many first time home buyer programs available to assist you in your purchase. These programs range from informational courses  like this one  to federal, state and local government agencies and non-profit groups that can assist you with down payments, lower-than-market rate financing and troubled credit.

Depending on your income and other personal factors, some of these programs can assist you in getting into a home for less than $1,000.

For information about first time home buyer programs and a variety of other home loan assistance programs in California, check out the California Housing Finance Agency’s web site at www.calhfa.ca.gov and the California Department of Housing and Community Development at www.hcd.ca.gov.

Police, teachers, firefighters and other public employees often have access to home loan programs that have favorable down payment options and special income qualifications. If applicable, check with your employee association or retirement system.

When choosing a loan, you’ll be confronted with a variety of choices of how interest rates are applied. There are fixed rate mortgages and adjustable rate mortgages (ARMs). Look at each type of loan carefully and decide, based on your financial situation and ability to stomach roller coaster interest rates, which is best for you!

Fixed rate mortgages are set at a constant interest rate over the period of the loan ‘ usually 15 or 30 years. This provides maximum stability as far as your monthly loan payment is concerned.

ARMs often provide a much lower initial interest rate at the inception of the loan. ARMs are set by an index plus a margin that equals an interest rate for a loan. An index is a gauge of interest rates which fluctuates with current market conditions. The margin is a fixed amount which gets added to the index. There are two different types of ARMs, the standard version that starts to adjust almost immediately after funding and the intermediate ARM, that doesn’t start to adjust for several months to several years.

There is a lot more to know about loans. You can learn more by visiting www.freddiemac.com/homebuyers, www.hud.gov or www.fanniemae.com (click on Homepath) or by simply asking questions of your real estate agent, lender and/or mortgage broker.

If you’re getting an ARM, look for ones with lower margins. Interest rates tend to be similar for most lending institutions, so the real gauge of saving money over time is a lower margin!

Look out for prepayment penalties on your loan! Having one can save you some money every month, but if you refinance or sell your home, you could get hit with thousands of dollars in penalties!

CalHFA Announces New Efforts to Help First-Time Homebuyers

CalHFA Announces New Efforts to Help Low and Moderate Income, First-Time Homebuyers Purchase Homes

SACRAMENTO – The California Housing Finance Agency (CalHFA) announced today a new fixed-rate mortgage program with special opportunities for low and moderate income, first-time homebuyers to receive thousands of dollars in down payment assistance.

The new CalHFA program, called CalPLUS, is an FHA-insured, 30-year fixed mortgage that includes a special zero interest junior loan for as much as 3.5 percent of the first mortgage loan amount to assist borrowers needing funds for a down payment. The Zero Interest Program (ZIP) down payment loan does not have to be repaid until the home is sold, refinanced or paid in full. It is only available as part of the CalPLUS loan.

“Since its inception, CalHFA has focused on helping Californians become homeowners, strengthening communities and neighborhoods,” said Claudia Cappio, Executive Director of CalHFA. “Down payments continue to be one of today’s biggest obstacles for first-time homebuyers. This new program is aimed at bridging that gap for California

A family taking out a $200,000 mortgage, for example, could receive up to $7,000 in down payment assistance through the ZIP benefit of CalPLUS. The CalPLUS can also be combined with other programs, including the California
Homebuyer’s Downpayment Assistance Program (CHDAP), which provides up to three percent of the purchase price or appraised value.

In addition to CalPLUS, CalHFA is also offering a 30-year, FHA-insured mortgage and re-starting its Extra Credit Teacher Program (ECTP). The ECTP offers up to a $15,000 deferred payment, subordinate loan for eligible teachers, administrators, classified employees and staff members working in high priority schools (API ranks 1-5), county
schools or continuation schools throughout the state. Additionally, the ECTP offers a conditional, forgivable interest feature.

Borrowers for these CalHFA programs are required to complete a financial education program. Borrowers must also meet limits on income and sales prices. In Los Angeles County, for example, the income limit for a family of four is $73,600; in Sacramento County, a family of four could earn up to $86,350.

The CalPLUS program can also be combined with a federal program that allows borrowers to offset part of their mortgage interest payments with credits on their federal income taxes. The Mortgage Credit Certificate Tax Credit may enable first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar-for-dollar tax credit on their U.S. individual income tax returns.

The California Housing Finance Agency (CalHFA)

The California Housing Finance Agency (CalHFA) has as its mission to finance below market rate loans to create safe, decent and affordable rental housing and to assist first-time homebuyers in achieving the dream of homeownership.

To accomplish its goal, the agency has four separate divisions: homeownership programs, mortgage insurance, multifamily finance and small business development. All of the agency s programs are targeted to renters and homebuyers that meet five criteria: first-time homebuyer purchasing a primary residence, intend to occupy the property, HUD income limits, credit and loan requirements of the participating lender and mortgage insurer, and a U.S. citizen or permanent resident alien.

CalHFA funds most of its activities with Proposition 46 money. It administrates programs such as the California Homebuyer s Downpayment Assistance Program (CHDAP) and the Extra Credit Teacher s Home Purchase Assistance (Extra Credit Teacher Program).

Funding, is directly channeled to consumers (through approved financial institutions) in the form of down payment assistance, financing and mortgage insurance. Also, to maximize homeownership opportunities, the agency cultivates partnerships and establishes new relationships within the affordable housing market place. Interested partners should contact CalHFA at 800.789.2432 or any of its divisions directly.


Insurance Programs

Private Mortgage Insurance (PMI) enables homebuyers to obtain conventional home loans with relatively small down payments. Prior to the advent of PMI, lenders of conventional mortgages traditionally required a down payment of at least 20 percent of the home’s purchase price.

Saving enough money to make a down payment of ten or twenty percent is one of the greatest barriers to homeownership today, so that requirement shrank the pool of potential homebuyers. Having insurance helps first-time and moderate-income purchasers surmount this obstacle by reducing the down payment required to obtain a mortgage to as little as three percent of the purchase price. Both private and federal programs offer mortgage insurance. Down payment requirements may vary depending on the insurance issuer.

Lenders typically require mortgage insurance on low down payment mortgages because loss experience and studies have shown that a borrower with less than 20 percent invested in a home is more likely to default on a mortgage should problems arise. In other words, there is a good correlation between the size of the down payment made on a mortgage and the eventual likelihood that the mortgage will be paid-off according to its terms.

Although it is the borrower who normally pays for PMI, the insurance coverage protects the lender, not the borrower. The insurance protects lenders against default-related losses on conventional first mortgages made to mortgage borrowers who make down payments of less than 20 percent of the home’s purchase price. PMI typically provides lenders with a default guarantee covering the top 20-to-25 percent of the mortgage balance. The lender assumes the risk for the remaining (uninsured) portion of the loan.

Lenders are required to automatically cancel mortgage insurance on new mortgages once the equity in a home reaches 22 percent. Homeowners may request to cancel at 20 percent equity levels. Lenders are required to provide homeowners with the information needed to cancel their insurance. At this point, the insurer is no longer liable for default of the loan. If the loan was sold to Freddie Mac or Fannie Mae, homeowners should contact their lenders once equity reaches 20 percent because they have more lenient requirements for insurance. Equity levels are determined according to the purchase price of the home. Any increased values do not apply. However, if the homeowner feels that his property has increased significantly in value, dropping the loan to value ratio below 75 percent, than the homeowner may request a new appraisal and cancel the PMI. There are some exceptions to cancellations, such as existing mortgages and high-risk loans.

Fannie Mae and Freddie Mac currently require mortgage insurance on all low down payment programs with a Loan to Value (LTV) ratio of 90-95 percent. A down payment of 3 percent requires coverage of at least 18%. Down payments of 5 percent require coverage between 25 and 18 percent. Loans with 10 percent down require 17 to 12 percent insurance coverage. There are several different options available to borrowers to increase initial buying power and reduce monthly payments while maintaining a security and safety level for lenders. At the inception of the loan, lenders can either add a small percentage rate increase or add additional points at the close of the deal. Information on Freddie Mac Mortgage Insurance and Fannie Mae Mortgage Insurance is available online. Fannie has partnered with PMI Mortgage Insurance Co. in order to create more affordable housing opportunities. This insurance company s website has information about how PMI helps homebuyers, how to calculate PMI premium, products, realtor training and PMI cancellations requirements.

CalHFA is home to four divisions: homeownership programs, multifamily programs, mortgage insurance services and small business development. Its mission is to finance below market-rate loans to create safe, decent, and affordable rental housing and to assist first-time homebuyers in achieving the dream of home ownership. The Mortgage Insurance Services division helps prospective homeowners move past current mortgage insurance challenges and restrictions by utilizing the California Housing Loan Insurance Fund. The insurance fund encourages lenders to make loans to hard-to-serve borrowers and buyers with little or no money for a down payment and closing costs. It also assists lenders by insuring loans for borrowers with past payment problems. Insurance is provided to those homebuyers that meet the income and area requirements. For more information: read CAR s paper CalHFA, and visit CalHFA Mortgage Insurance website.

Mortgage Insurance Services Programs

This list constitutes an inventory of mortgage insurance programs requiring minimal upfront funds with participating lenders.
Cal Rural ACCESS 97/6 (conforming, statewide)
CalHFA Conventional
CalPERS 97 & 97/3 CalPERS members have additional benefits such as reduced Title and Escrow Fees through , Stewart Title and Old Republic Title. Other benefits are 30-day rate lock, 100% financing option, Free 60-day rate protection, two free float downs, controlled closing fees, closing cost assistance and reduced mortgage insurance rates. For more information go to CalPERS Advantage program.
CalSTRS 80/17
CalSTRS 95 Conventional
CalSTRS 95/5
Fannie Mae & Freddie Mac 97/3
Fannie Mae & Freddie Mac Conventional 95 & 97 LTV
Freddie Mac 100 & 100/3
Lease Purchase – ABAG Program
Lease Purchase 97/3
NHF – Access & Gold 97/7 Conventional


CalHFA Multifamily Loan Finance Programs Division

Provides permanent financing for the acquisition, rehabilitation and preservation of existing rental housing, as well as the new construction of rental housing. CalHFA-financed affordable units are targeted to low and moderate-income families and individuals in California. Through its subdivision Specific Multifamily Programs, it also offers development information including lending programs, financing terms, loan application forms and processing requirements.

CalFHA establishes partnerships with city and county officials, local housing agencies, affordable housing developers, construction lenders and other housing sponsors to develop and deliver its programs. This collaborative approach helps expand housing opportunities by maximizing the financial resources available to support the State s housing needs.

The division offers information on:

  • Multifamily Programs
  • Construction Loan Program
  • HUD Section 202 Refinancing Program
  • Loan to Lender Program
  • Permanent Financing Program
  • Predevelopment Finance Program
  • Preservation & Acquisition Finance Program (Prop. 46)
  • Special Financing Needs
  • Tax Exempt Bridge Financing Program
  • Multifamily Asset Management and Affordable Rental Housing Developments.

If you are interested in a partnership Multifamily Finance Division call 916.322.5123 or visit www.calhafa.ca.gov.


Purchase Assistance Programs

For most first-time homebuyers, the greatest obstacle to owning a home is the down payment.

Fortunately, to help fill this need, homebuyers throughout the State of California can access different assistance programs that enable them to reach the dream of homeownership. The federal, state and local government, and non-profit organizations have designed programs to help very low-, low- and moderate-income buyers attain homeownership that wouldn t be otherwise possible.

Some of the programs offered are available on a statewide basis, while others are available only locally, since they have been specially designed for residents of a particular community or for individuals with a special set of housing constraints. It is always recommended to approach the originating housing entity to find about the particular requirements and scope of any given program.

Purchase assistance programs, whether down payment, closing costs, pre-paids or rate-buy-downs take the form of loans or grants. These financial delivery mechanisms are designed to help households reach the dream of homeownership.

Loans usually are deferred, low-to-zero-interest and require back payment at the time of sale or transfer of property. Loans are sometimes referred as Soft or Silent Seconds, depending upon whether the loan is to be paid at a low interest rate or it is forgiven after a certain conditions are met. The loan originator can be the state, a regional, local or non-profit housing agency.

The most common conditions attached to any loan program are:

  • First time buyers must not have home ownership in any property within the last 3 years.
  • Purchase price and income level limits are based on area medians for family size, usually to HUD standards.
  • Assistance with 0 20 percent of purchase price or a fixed quantity, whichever is less.
  • Below market interest rate deferred until sale or transfer of the home.
  • Balloon payment of loan at the time of transfer or selling of property.

Grants are money gifts where the no back payment by the buyer is required, but where a fee-for-use is required as well as a contribution from the seller. Grant providers are usually more flexible than loan providers in the set of conditions attached to the funding process. Grant originators typically are non-profit organizations.

Community Development Block Grant Funds (CDBG) and redevelopment agency affordable housing set-asides revenue provide assistance to first-time homebuyers in the form of deferred loans. For a local government to have access to CDBG funds, it must have an approved Consolidated Plan. With the money obtained from these funds, the local government can create a financial assistance program for first time homebuyers with income restrictions. The final aid might come in the form of grants or down payment deferred loans. In addition, there might be cooperation with non-profit organizations to provide them with funds for homeownership education programs.

CalHFA Down Payment Assistance Programs has available several down payment programs designed for homebuyers facing different needs, such as living in a high cost area or no down payment funds.

The programs are:

  • Affordable Housing Partnership Program (AHPP) Contains information on AHPP list of approved subordinate localities and programs, property and income requirements, interest rates and sales price limits.
  • California Homebuyer’s Down payment Assistance Program (CHDAP)
  • CalHFA Housing Assistance Program (CHAP)
  • Extra Credit Teachers Home Purchase Assistance Program (ECTP)
  • High-Cost Area Home Purchase Assistance Program (HiCAP)
  • Homeownership In Revitalization Areas Program (HIRAP)
  • Oakland Teacher Program
  • Home Choice Downpayment Assistance Program
  • School Facility Fee Down Payment Assistance Program (SFF)

Department of Housing and Urban Development (HUD). The agency maintains several homeownership assistance links. Please consult:

  • California programs sorted by city
  • Clearinghouse for Affordable Housing and Community Finance Resources: Over 200 housing programs, government, private lenders and foundation grants. Each program listing identifies the goals, eligible activities and type of funding, as well as such critical and timely information as application deadlines and current funding availability.
  • FHA Bridal Registry: A special interest-bearing account set up for down payment is available with any participating lender.
  • Local Down Payment Programs: Programs listed by locality.
  • Homeownership Vouchers: Part of the  Housing choice voucher program sponsored by the U.S. Department of Housing and Urban Development (HUD).

Homeownership vouchers assist public housing residents that are first-time homeowners with their monthly homeownership expenses. The home must pass an initial housing quality standards inspection conducted by the Public Housing Authority (PHA) and an independent home inspection before the local PHA may approve the purchase by the family.Fannie Mae s Homebuyer Funds Finder. Fannie has very useful web tools to help housing professionals in finding financial funds for borrowers. Homebuyer Funds Finder helps locate down payment and closing costs. A generic search works best.

Individual Development Account Network. Maintains information on how and where to start matched saving accounts for down payment assistance and other purposes.

Non-profit organizations (NPOs) are the main providers of grants that can be used to cover down payment, closing costs, pre-paids, rate buy-downs and automatic Mortgage Payment Protection. NPOs ultimate goal is to help people access homeownership and help buyers keep some financial reserves. The flexibility of the programs is also reflected in the fact that most of them allow for repeat buyers, have no income limits or sales price limits. They actively encourage builders and real estate professionals to participate, and they offer training assistance.

Inquire with local non-profits about the availability of such programs in your area.

  • American Family Funds
  • AmeriDream Downpayment Gift Program
  • California Cares
  • Clearinghouse for Affordable Housing and Community Finance Resources
  • Consumer Debt Solutions Inc. (CDS)
  • Fair Housing Assistance Ken Ray Inc.
  • Family Home Providers
  • Fannie Mae s Homebuyer Funds Finder
  • Homeownership Alliance of Non-Profit Downpayment Providers
  • Homes for All Program
  • Housing Action Resource Trust (HART)
  • Local housing authority or economic agency can provide information on local NPOs offering assistance.
  • Neighborhood Gold
  • Neighborhood Reinvestment Corporation A prominent organization with several chapters in California.
  • Partners in Charity
  • The Genesis Program
  • The Nehemiah Program.


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