Since 1975, the California Housing Finance Agency (CalHFA) has been making low interest rate loans through the sale of tax-exempt bonds. As the state's affordable housing bank, CalHFA is a completely self-supporting state agency and the bonds are repaid by revenues generated through mortgage loans, not taxpayer dollars.
CalHFA's mission is to provide affordable housing finance opportunities to low and moderate income first-time homebuyers. They do this by offering below market, fixed rate mortgages along with down payment assistance (dpa) programs. CalHFA has recently launched their new FHA program (they've never offered FHA before) as well as their improved Cal30 program and their CHDAP dpa program.
CalHFA generally offers a reduced interest rate for eligible homebuyers who meet the "Low Income" limits, adjusted for household size. Loans with competitive interest rates are also available to "Moderate Income" households. The following are the current rates to eligible low-medium income applicants for both conventional loans as well as the FHA loans:
Both of these loan programs can also be combined with CalHFA's dpa program CHDAP or they can be combined with another HUD approved dpa program (AHPP).
CHDAP provides down payment assistance in the form of a deferred payment second loan, commonly referred to as a "silent second" because you make no payments on the loan for as long as you hold the loan. The amount of the loan is up to the lesser of three percent (3%) of the purchase price or appraised value. Interest is calculated at 3.25% per annum simple interest and is not due until the loan is sold and/or refinanced.
Borrowers must be first-time homebuyers as well as meet the program income guidelines and requirements and the property must be within CalHFA's sales price limits, which are as follows:
All borrowers must complete a homebuyer education course and receive a certificate of completion through an eligible homebuyer counseling organization. A "targeted" area is a census tract that has been identified as an area where 70% of the residents who live there earn less than 80% of the the statewide median income. CA currently has 33 counties that have targeted areas. Nearly half of the designated targeted areas are located in Los Angeles county.
Today's real estate market can be really scary, which is why it's important to get as much information as possible before starting your search. The pre-approval process is not a simple process and it's because it can get really complicated and convoluted, that borrowers today need affordable loan options that are best suited for their own needs.
That's what I'm here for and I would love to be able to assist you in your search for an affordable home loan here in Los Angeles or Ventura county. For more information, please feel free to contact me, Donne Knudsen, at 805.2069123 or donne4loans@earthlink.net.
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