California Housing Finance Agency (CalHFA) allows a buyer to purchase a home with Zero down payment, with a FICO score generally above 630, and offers below market fixed interest rate financing which is fully amortized over 30 years.

Here are basic qualifications and limitations of the CalHFA loan program;

1. First Time Home Buyers: California created this program to assist first time home buyers, assuming the prospective Home Buyer cannot have owned a home in the past 3 years. If you owned a home 4 years ago and sold it, then you may be eligible as a first time homebuyer as long as you have never used the CHFA loan before.

2. Credit Requirements: The home buyer must be able prove their income with either W-2 forms from the employer or if self employed, one must produce 2 years of Tax Returns or 12 months of bank statements. Secondly, the CHFA program only offers fixed interest rate loans, so you need not worry about rate increases in the future. The FICO score requirement varies, but typically a 630 or better FICO is sufficient. There is some flexibility to borrowers FICO scores, if they are below 630, it may still be possible to qualify for a CalHFA loan depending upon the reasons for the lower FICO score.

3. Income Limits: The program is geared to assist first time homebuyers. There are maximum income limits for home buyers. It varies by which county in California that the home is located in. For San Diego, CA. the income limits for Moderate Income home buyers are as follows: $94,800 for a 1 to 2 person family and $110,600 for a 3 or more person family.

4. Sales Price Limits: The program is designated for first time home buyers in California. The State of California has maximum sale price limits for existing homes and new construction. CalHFA allows the Seller to grant the home buyer a credit through escrow that helps to pay for some of the Buyers closing costs. CHFA does not loan money directly to consumers, but works through and uses approved mortgage lending institutions to qualify potential borrowers and to fund the mortgage loans. The fee's that mortgage lenders may charge can vary from lender to lender, but the program is highly regulated by the State so the variation in fee's are kept to a minimum.

There are two types of CalHFA loans; Conventional CalHFA loan and a FHA based CalHFA loan. They each have their advantages and disadvantages such as the potential of a Recapture Tax, Lower Interest Rates for Low Income buyers versus Moderate Income Buyers, High Cost versus Non High Cost Areas, special Lower Interest Rates for School Teachers in Target areas, and more. Fore more information about CalHFA loans in California, please contact us at 888-420-3863.