Are you a first time home buyer in California looking to make your dream of homeownership a reality? If so, the California Housing Finance Agency (CalHFA) may be able to help. Established in 1975, CalHFA is a government-sponsored organization that provides assistance to qualifying homebuyers through down payment assistance loan programs and financial assistance options. In this blog, we’ll break down everything you need to know about this down payment assistance loan program, including eligibility requirements and types of loans available.

How does California help first time home buyers?

The California Housing Finance Agency (CALHFA) provides some helpful resources for homebuyers. These agencies provide borrowers with a broad range of loans to first-time homeowners at their own specific interest rates.

What is CalHFA

The Calhfa Home Buyer Down Payment Assistance Program is a state-funded program that provides assistance to eligible first-time home buyers in the form of a deferred-payment loan. The program is designed to help low- and moderate-income individuals and families purchase a home by providing funds for down payments and closing costs.

Eligible participants can receive up to 5% of the purchase price of the home, up to a maximum of $100,000, to be used for down payment and closing costs.

The loan is deferred for 30 years or until the property is sold, refinanced, or transferred. The program also requires homebuyers to complete a homebuyer education course and meet certain credit and income requirements.

The Calhfa Home Buyer Down Payment Assistance Program is administered by the California Housing Finance Agency and is available to eligible first-time home buyers throughout the state.

How CalHFA works

Determine if you are eligible for down payment assistance:
Before participating in the program, you will need to confirm that you meet the income, purchase price, credit, and occupation requirements for the CalHFA Down Payment Assistance Program.
Find a participating lender connected with down payments assistance programs:
The Calhfa Home Buyer Down Payment Assistance Program works in partnership with a network of participating lenders. You will need to find a lender that participates in the down payment assistance and can help you through the loan application process.
Complete a homebuyer education course: The CalHFA program requires all borrowers to complete a homebuyer education course before closing on a loan. There are a variety of options available, including online classes and in-person workshops. You will need to complete the course and receive a certificate of completion.
Apply for a loan: Once you have completed the homebuyer education course, you can apply for a loan through a participating lender. You will need to provide financial information, including income, assets, and credit history, to qualify for the loan.
Meet other down payment assistance requirements: In addition to completing a homebuyer education course and applying for a loan, you will need to meet other program requirements, such as meeting income and purchase price limits, and meeting credit and occupation requirements.

How much does CalHFA give you?

MyHome Delay-Pay junior loans cover down payments and closing expenses of minus 3.5% or less.

Eligibility requirements for Calhfa Home Buyer Down Payment Assistance Program

The first step towards taking advantage of the CalHFA down payment assistance program is ensuring that you meet all the necessary eligibility requirements. To qualify for the program, you must meet all of the following criteria:

• Be a first-time homebuyer to qualify (or have not owned a home in the past three years)

• Have an acceptable credit score and debt-to-income ratio

• Earn an income within certain limits based on the area being purchased in

• Be either a U.S. citizen or permanent resident/qualified alien

• Complete an approved home buying counseling course Properties Eligible for Calhfa Home Buyer Down Payment Assistance Program . Once you’ve established that you are eligible for the program, it’s time to start shopping around for properties.

Home buyer education courses

Online Courses: CalHFA partners with eHome America, which offers an online homebuyer education course that can be completed from the comfort of your own home. The course is available in English and Spanish and can be found at the following link: https://www.ehomemortgage.org/
In-Person Workshops: CalHFA also partners with various organizations and agencies that offer in-person homebuyer education workshops throughout California. You can find a list of upcoming workshops on the CalHFA website, under the “Homebuyer Education” tab: https://www.calhfa.ca.gov/homebuyer/homebuyer-education/
HUD-Approved Counseling Agencies: CalHFA also accepts certifications from HUD-approved counseling agencies. You can find a list of HUD-approved agencies on the HUD website: https://www.hud.gov/topics/homeownership

What is the advantage of using CalHFA

Calhfa Home Buyer Down Payment Assistance Program sponsored by CalHFA.

Lower credit score requirement: CalHFA program has a minimum credit score requirement of 640, while FHA and VA have higher credit score requirement.
Lower Interest rates: CalHFA program offers lower interest rates compared to FHA and VA loan programs.
Lower mortgage insurance cost: CalHFA program does not require borrowers to pay mortgage insurance, unlike FHA and VA loans which require borrowers to pay mortgage insurance.
Lower down payment requirement: CalHFA program requires a minimum down payment of 3%, while FHA loans require 3.5% and VA loans require no down payment at all, but they have a funding fee that can be financed into the loan.
Assists with Closing costs: CalHFA down payment assistance provides funds for down payments and closing costs up to 5% of the purchase price of the home, up to a maximum of $100,000, while FHA and VA loans do not provide assistance with closing costs.
Homebuyer Education: CalHFA down payment assistance requires borrowers to complete a homebuyer education course, FHA and VA do not require borrowers to take a homebuyer education course.

CalHFA interest rates

Calhfa Home Buyer Down Payment Assistance Program interest rates are usually lower than the conventional market rates and similar to the rates offered by FHA loans. This is because Calhfa Home Buyer Down Payment Assistance Program’s interest rates are based on the market rate at the time of the loan commitment and are fixed for the life of the loan, just like conventional loans. Additionally, CalHFA loans are 30-year fixed-rate mortgages, which is the same as FHA loans.

Calhfa Home Buyer Down Payment Assistance Program’s interest rates can also be lower than the FHA rates because CalHFA loans don’t require mortgage insurance and have lower closing costs, which can make them more affordable for borrowers. However, it’s important to note that the program and its requirements may change over time. So, it’s always a good idea to check the CalHFA website or consult with a participating lender to confirm the current program guidelines and requirements.

It’s also important to note that the interest rates for FHA loans are determined by the Federal Housing Administration (FHA) and may be different from the interest rates offered by CalHFA down payment assistance.

Eligible properties

There are several restrictions related to which properties are eligible under the program so be sure to familiarize yourself with these before committing to any purchase agreements.

Some of these restrictions include maximum sales price not exceeding $765K;

location within California;

single family one unit homes with maximum lot size of 5 acres

(some condos allowed);

restrictions based on property type.

Income limits

To be eligible for the Calhfa Home Buyer Down Payment Assistance Program, individuals must meet certain income requirements. The maximum income limit depends on household size and the county in which the property is located. In general, household incomes must be below a certain percentage of the median income in the area. Calhfa Home Buyer Down Payment Assistance Program also considers factors such as debt-to-income ratio, credit history, and the ability to repay the loan. Eligible participants must also be first-time homebuyers and must meet certain purchase price limits for the property they wish to purchase. It is recommended that interested individuals contact CalHFA or a participating lender for specific information about county income limits and their income qualifications for the program.

Occupancy requirements

The California Housing Finance Agency (CalHFA) and Calhfa Home Buyer Down Payment Assistance Program has occupancy requirements that eligible participants must meet in order to qualify for the program and down payment assistance.

The main requirement is that the property must be the borrower’s primary residence. This means that the borrower must occupy the property within 60 days of closing and must live in the property as their main home for a minimum of three years.

If the borrower moves out of the property before the three-year occupancy period is up, they may be required to repay some or all of the assistance received through the program. Additionally, the property must be a single-family home, townhouse, or condominium and must be located in California.

It is recommended that interested individuals contact CalHFA or a participating lender for specific information about the program’s occupancy requirements.

Types of Calhfa Home Buyer Down Payment Assistance Program.

Now that we’ve discussed eligibility requirements and property guidelines, let’s take a look at what types of loans are available to qualify under this home buyers program.

The two main types of loans offered by CalHFA

Government loans

CalHFA FHA Program: The CalHFA FHA Program offers a 30-year fixed-rate loan insured by the Federal Housing Administration. Note that an FHA loan has specific borrowing and property requirements that must be met in addition to those of CalHFA.
CalPLUS FHA Program: The CalPLUS FHA Program is an FHA-insured first mortgage with a slightly higher 30-year fixed rate than the standard FHA program, but the upside is it can be combined with other financial assistance programs (outlined below).
How can I get around a down payment on a house?
The current government-funded loan is backed by VA and USDA. Almost every credit facility requires a very specific criteria for obtaining zero-down loans.
CalHFA VA Program: The CalHFA VA Program is a 30-year fixed-rate loan insured by the U.S. Department of Veterans Affairs. Note that the VA has its own requirements for eligibility.
CalHFA USDA Program: The CalHFA USDA Program offers a USDA-guaranteed 30-year fixed-rate loan. Note that to qualify for this loan, a property must be located in a USDA-eligible rural area.

Conventional loans

CalHFA Conventional Program: The CalHFA Conventional Program offers a 30-year fixed-rate loan insured through private mortgage insurance, or PMI.
CalPLUS Conventional Program: The CalPLUS Conventional Program offers a conventional mortgage with a slightly higher 30-year fixed rate than the standard conventional program. But it can be combined with other financial assistance programs

Financial assistance for down payments, closing cost assistance

In addition to an affordable loan, the Calhfa Home Buyer Down Payment Assistance Program also offers a variety of financial assistance programs that can be combined with the other offered loans that help further lower the costs of a mortgage loan.

In addition, there are also several financial assistance options available through CalHFA that can help lower costs even further such as:

MyHome Assistance Program

MyHome Assistance Program providing up to 3.5% towards down payment or closing costs ($11,000 max)

Home-buying assistance for school teachers and employees

School Teacher and Employee Assistance Program is offering up to 4% towards purchase price for K12 public school teachers & employees

CalHFA Zero Interest Program

CalHFA Zero Interest Program, is a closing cost assistance, also known as ZIP, is a second mortgage loan that can be used with a CalPLUS loan, providing zero interest second mortgages amounting 3% of borrower’s 1st mortgage that can be used as down payment or closing costs.

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Conclusion:
For first-time home buyers in California looking to make their dreams come true, taking advantage of what the California Housing Finance Agency has to offer is certainly worth considering! By understanding all aspects related to eligibility requirements, properties eligible under this program, as well as different types of loan programs available through Calhfa Home Buyer Down Payment Assistance Program coupled with financial assistance options offered by them, could make your journey into homeownership much more manageable! To learn more about these down payment assistance options available through Calhfa Home Buyer Down Payment Assistance Program, visit their website today! Aspiring homeowners can find out if they qualify for any of these financial services by contacting an approved lender today! With the right information and guidance, these homeowners will have access to resources that can help them reach their dreams!
Calhfa Home Buyer Down Payment Assistance Program 2023