CalHFA restarts down payment assistance and launches new program
The CalHFA (California Housing Finance Agency) is all set to restart its down payment assistance programs and launch a new mortgage program for first time buyers. One helpful feature of the programs is that, they can be used independently of CalHFA first loans.
What are the down payment assistance programs on offer?
There are 2 down payment assistance programs being offered by the CalHFA. These are given below:
1. California Homebuyer’s Down Payment Assistance: The CHDAP or California Homebuyer’s Down Payment Assistance Program is a deferred loan worth 3% of the home value. First time homebuyers need not repay the loan until their homes are sold, refinanced or paid in full. This assistance program can be used with FHA loan and the new mortgage product launched by CalHFA.
2. School Facility Fee Down payment Assistance: This program provides qualified home buyers with a partial or full rebate of school facility fees. The average rebate is around $5,100. But the amount varies according to school district and square footage of the home. It works like a conditional grant, not a loan. So, the buyer need not repay it if he occupies property for 5 years. However, if he doesn’t stay on the property for minimum 5 years, then he has to pay off the grant on a pro rata basis.
What is the new mortgage program on offer?
Cal30 is the new loan program being offered by CalHFA. It is a 30 year fixed rate mortgage which requires stable monthly payments at low rates of interest (approx. 5% and slightly above). It is similar to a fixed rate mortgage insured by the FHA. So, if you’d like to go for it, you’ll need to have a credit score of 640 and make a down payment worth 5% of the home value.
To use the CalHFA mortgage, one has to meet the income and sales price guidelines for low and moderate income families. The guidelines may vary with respect to each county in California. For instance, if you’re in a family of four or more in Santa Clara County, you can apply for a Cal30 mortgage if your household income is $126,600 or less and the home being purchased is worth $637,645 or less. However, there’s an exception – if you’re purchasing home in low income neighborhoods, then you may qualify for Cal30 even if you aren’t a first time buyer.
The Cal30 mortgage and the down payment assistance programs offered by CalHFA are no doubt helpful for low or moderate income first time buyers. The best thing is, these can be combined with a state tax credit of $10,000 available to first time buyers thereby making homeownership more affordable in California.