• Alexander Parker

First Time Home Buyers, Changes Coming to One of the Most Used Programs.

Updated: Oct 23, 2019

The money you put "down" or the down payment on your home loan can be one of the largest hurdles for many first-time homebuyers. Many home buyers are actually qualified for the home loans, and can actually can afford the monthly mortgage, however, saving up the needed down payment an be a tough battle these days.

Down Payment Assistance

The CalHFA loan program for first time home buyers is an amazing assistance program, that helps home buyers in these very specific situations. If a potential home buyer meets certain guidelines, they can possibly be approved for this program and be a huge step closer to home ownership. Take a look at the different types of programs below:

CalHFA FHA Loan Program The CalHFA FHA Program is an FHA-insured loan featuring a CalHFA 30 year fixed interest rate first mortgage.

CalPLUS FHA Loan Program The CalPLUS FHA program is an FHA-insured first mortgage with a slightly higher 30 year fixed interest rate than our standard FHA program and is combined with the CalHFA Zero Interest Program (ZIP) for closing costs.

CalHFA VA Loan Program The CalHFA VA program is a VA-insured loan featuring a CalHFA fixed interest rate first mortgage. This loan is a 30-year fixed interest rate first mortgage.

CalHFA USDA Program The CalHFA USDA Program is a USDA Guaranteed first mortgage loan program, which can be combined with the MyHome Assistance Program (MyHome) or the School Teacher and Employee Assistance Program (School Program). This loan is a 30-year fixed interest rate first mortgage.

MyHome Assistance Program Offers a deferred-payment junior loan of an amount up to the lesser of three and half percent (3.5%) of the purchase price or appraised value to assist with down payment and/or closing costs.

School Teacher and Employee Assistance Program (School Program) This program is for teachers, administrators, school district employees and staff members working for any California K-12 public school, which includes Charter schools and county/continuation schools. Applicants must also be first-time homebuyers. School Program junior loans are up to 4% of the purchase price, and can only be combined with an eligible CalHFA first mortgage loan. School Program subordinate loans can only be used for down payment assistance and/or closing costs.

Program Insight

These programs have the ability to assist you with the purchase of your home, by basically financing both the down payment and (if needed) your closing costs into the loan. The rates do differ depending on which type of loan program you do choose, and there are certain guidelines that need to be met.

For instance, with the FHA income requirement is that the home buyer needs to make under a certain amount in order to qualify for the assistance, ie: Inland Empire income guideline is $138,000, while LA County is $144,000.

Important Change

Credit scores have to be in good condition as well, starting at 660 (beginning November 1, 2019) in order to be eligible for this FHA program. The previous score needed to qualify was 640, so partnering with your lending partner to create a game plan of building credit is essential. Home buyers have been able to increase their credit scores 40+ points in as little as 60 days.

This credit score guideline is one of the bigger changes that took place with this program. So creating a game plan to get you to this guideline if you are not already there is essential, and ensuring you partner with a knowledgeable realtor and lending professional is key.

For additional information or to begin the pre-approval process, contact us direct at 949.427.1350 or 310.307.3466.

Our lending partners are available to discuss with you, credit scores, financing, and the necessary steps needed to get qualified for this type of program if you are interested.

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