Qualify for more home with Below Market Interest Rates in California

Real Estate Agent with HomeWay.tv - Keller Williams Realty East Bay 925-337-8489

California Housing Finance Agency (CalHFA)

For over 30 years, California Housing Finance Agency (CalHFA) has supported the needs of renters and first-time homebuyers by providing financing and programs that create safe, decent and affordable housing opportunities for individuals within specified income ranges. Established in 1975, CalHFA was chartered as the State's affordable housing bank to make below market-rate loans through the sale of tax-exempt bonds. A completely self-supporting State agency, bonds are repaid by revenues generated through mortgage loans, not taxpayer dollars.

CalHFA offers:

•·         100% Financing up to $921,719

•·         Up to 106% Financing with down payment assistance programs

•·         Below Market Interest Rates

•·         30 and 40 yr terms and a 35 year term with interest only for the first 5

•·         Forgivable grants for Teachers and Administrators

•·         Grants for purchasing a newly constructed home

The big number listed above is not the typical max loan available throughout the State.  The max loan depends on what county the home is located in.  Please contact a Certified CalHFA Loan Officer to get details for a particular client and property.

CalHFA offers several products for both primary financing and down payment assistance.  Here is a sample of CalHFA rates as of Nov 29th:


Interest Rates1

30 Year Fixed Mortgage (Low Income)2


30 Year Fixed Mortgage


35 Year Fixed Rate - 5yr Interest Only (Conforming)


35 Year Fixed Rate - 5yr Interest Only (Non-conforming)


40 Year Fixed Rate Mortgage


CalHFA rates can be locked up to 90 days for a pre existing home and up to 180 days for new construction.  Longer locks are available at additional cost.

CalHFA also offers Down Payment Assistance in the form of deferred payment loans and grants.  Deferred payment loans have no payments due during a specified term or until certain criteria is meet.  Payments for CalHFA deferred payment loans are not due until you refinance, sell the home or your first mortgage comes to term.

What is the benefit of a deferred payment loan?

The biggest benefit is the payments are not counted against you in qualifying for your first mortgage.  The funds can also be used to reduce your loan-to-value ratio on your first mortgage or to cover closing costs.  The assistance does not require that you get a CalHFA first but you still must meet the CalHFA income and purchase price restrictions.

Here are the Down Payment Assistance deferred payment loan options:

CHAP-CalHFA Housing Assistance Program
Offers a deferred-payment junior loan of an amount up to the lesser of three percent (3%) of the purchase price or appraised value.

CHDAP-California Homebuyer's Downpayment Assistance Program
Offers a deferred-payment junior loan of an amount up to the lesser of three percent (3%) of the purchase price or appraised value.

HiCAP-High Cost Area Home Purchase Assistance Program
Designed to assist first-time homebuyers in the highest housing cost areas of the state. Up to $7,500.

ECTP-Extra Credit Teacher Home Purchase Program (Teacher Loan)
A below market interest rate CalHFA first loan, together with a forgivable interest CalHFA junior loan to assist eligible teachers, administrators, staff members and classified employees to purchase their first home.

SFF-School Facility Fee Down Payment Assistance Program
A conditional grant program that provides assistance to buyers of newly constructed homes throughout California.

Because the funds to provide these programs are paid in part by State bonds the funds are subject to the Recapture Tax.  Most people will not be effected by recapture.  Here are the basic rules for recapture.

•·         Your income has to have increased greater than 5% year over year (That's an increase of 5% every year) more than the max amount to qualify for the program.

•·         You have to have an equity increase in the home.

•·         Your home is sold during the first nine years of ownership

If all of these items are not met then recapture does not apply.  If you do fall under the recapture clause then you likely are better off financially than when you bought the home, so give a little back.  You can view CalHFA's Guide to Recapture by clicking here.

Danke Schoen,

 Nate Ellis



Equal Housing Lender

1 The interest rates are those in effect on the date shown. The down payment assistance loan interest rates are calculated as simple interest per annum. However, all of the rates shown are subject to change without notice. CalHFA does not lend money directly to consumers. CalHFA works through and uses approved private lenders to qualify consumers and to make all mortgage loans. The fees consumers pay could be different depending on the lender and the program.

2Lenders who obtain a reduced interest rate reservation for low income applicants who are subsequently determined to have an annual income that exceeds the low income limit will be offered the interest rate for moderate income families, assuming they meet CalHFA's moderate income limits.

Comments (3)

Andrew Scherer
Approved Mortgage Group - Doylestown, PA
Real Estate Representation At It's Finest

I absolutely love govie programs and their potential to get our clients into homes.  Here in Connecticut, we have a similar program called CHFA (Connecticut Housing and Finance).  You provided great information for everything on this program, and hopefully you get a lot of responses from this!

Just a suggestion as well, have you thought about sharing this information with community on WannaNetwork?  They are ranked #1 on Google for Real Estate Networking, and a lot of LO's post their programs there.  Just an idea to get your name out there a little more!

Anyway, I wish you well, and (again) great information!

-Andy Scherer (Connecticut Home Loans)

Dec 15, 2007 12:51 PM
Nate Ellis
HomeWay.tv - Keller Williams Realty East Bay 925-337-8489 - Concord, CA
"Mr Danke Schoen"
Andy-Thanks for the wonderful comment.  It's great to see others out there spreading the word.
Dec 15, 2007 03:32 PM

Now  when you have a chance to refinance to lower rate this program shows you all negative aspects

Apr 28, 2009 09:48 AM