August 2013 the State of California Housing Finance Agency (CalHFA) has announced a new round of affordable lending programs designed to help well-prepared low and moderate income families become California homeowners.
New and old programs have been designed to give first time homebuyers access to programs that have special provisions that promote sustainable homeownership, responsible underwriting and a minimal required investment.
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New Qualifying Guidelines
Consistent with it’s effort to create sustainable homeownership, CalHFA has published new qualifying guidelines for it’s programs.
Updated underwriting guidelines are consistent with QM (qualified mortgage) Rules.
While some of these guidelines are more restrictive that programs of the past, the increased attention to financial stability allows CalHFA to offer some pretty amazing programs.
Updated Eligibility Changes to CalHFA Loans:
- Updated income limits – increased in many Counties
- 2 Year Home Warranty required unless the purchase is new construction.
- 43% Debt to Income (DTI) Limit
- 8 Hour Homeowner Education Course required
- Minimum Required Investment
- Credit Score 640-679 = $1,500
- Credit Score 680+ = $1,000
- Required borrower contibution can be a gift
- 103% Maximum Combined Loan to Value including Assistance Programs
- Minimum Credit Score 640
- Non Occupying Co-Signers allowed – income does not count toward limits
Now let’s take a look at some of the fantastic programs that CalHFA has scheduled for release as early as September 2013.
Extra Credit Teacher Program
This is a great surprise that the ECTP program has been resurrected after getting the chopping block years ago.
Who’s Eligible: Teachers and Staff in High Priority Schools (Rank 1-5)
How Much: $7,500 in non low cost areas / $15,000 in high cost areas*
*high cost is determined by county. Orange and Los Angeles County is considered high cost.
Loan Terms: Deferred Payments, Interest forgiven after 3 years
Eligible: Must be accompanied by a CalHFA FHA or CalPLUS first mortgage
Related Reading: Extra Credit Teacher Program – ECTP
CalPLUS with ZIP – Zero Interest Program
CalPLUS is a FHA first mortgage loan with a fully amortized fixed rate. Buyers qualified for a CalPLUS mortgage have exclusive access to ZIP.
ZIP is a deferred payment, zero interest second mortgage that is only available with the CalPLUS first mortgage.
This new CalHFA loan program is designed to help well-prepared low to moderate income families become homeowners in California.
Who’s Eligible: First Time Homebuyer* in the State of California
*have not owned a primary residence home in past 3 years – exceptions for buyers in targeted areas and qualified Veterans
How Much: ZIP 3.5% of First Mortgage amount (includes UFMIP) can be used for Down Payment or Closing Costs
ZIP Loan Terms: Zero interest, No payments.
Eligibility: Qualification for CalPLUS automatically makes you eligible for ZIP
Other Assistance: Eligible to be used with CHDAP, ECTP, MCC & EEM
Related Reading: CalPLUS with ZIP – Zero Interest Assistance
Existing CalFHA programs CalHFA FHA and CHDAP remain strong contributors to the new Housing Finance Agency lineup.
While the programs themselves have not changed, they are now subject to the Updated Eligibility Changes listed above.
Would you like to get more information about Existing CalHFA loan programs? Here are some great resources:
Related Reading: CalHFA FHA Loan Program
Related Reading: CalHFA CHDAP Buyer Assistance
Questions & Answers
The best way to raise the bar on public knowledge about these amazing State of California homebuyer programs is to talk about them openly.
The best way to start the conversation is to ask a question or leave a comment below.
You may also email or call if you have questions about these programs and upcoming programs expected to be announced later this year.