6/7/2023
There are many independent institutions that can help you buy a home or get a rental at reduced rates. In this category is the California Housing Finance Agency, which we review below.
What is CalHFA?
The California Housing Finance Agency is an institution that offers financial services related to home buying/renting.
Established in 1975, it was created out of the Zenovich-Moschone-Chacon Housing and Finance Act. It is also an independent agency within the California Department of Housing and Community Development (HCD).
The purpose of the former CAHF (until 2002) and now CalHFA is to provide credit and plan-based assistance to middle/low-income persons seeking housing. Through its multifamily division, it finances affordable rentals through partnerships, builders and other organizations within the state.
It also has a single-family division that provides mortgages and down payment assistance to first-time homebuyers. As a self-sustaining institution, the bonds it generates are repaid from the proceeds of its mortgage loans and it receives no taxes from taxpayers.
CalHFA Mortgage Programs
Among the primary services offered by the California Housing Finance Agency are mortgages for first-time homebuyers. There are two options:
Conventional mortgage loans
- CalHFA Conventional Program. This is a 30-year, fixed-rate financing with private insurance processed in the common market.
- Conventional CalPlus Plan. Unlike the previous one, this plan has a higher interest rate and the term is also 30 years. This alternative includes the ZIP (Zero Interest Program) to process closing costs.
Government-backed mortgage loans
- CalHFA FHA loan. This first-time buyer program is insured by the Federal Housing Association and is a 30-year fixed-rate mortgage.
- CalPlus FHA loan. Unlike the standard plan, this FHA-backed program has a higher APR. It is also combined with the Zero Interest Program for closing costs.
- CalHFA Credit with the USDA. This 30-year fixed-rate mortgage can be combined with the MyHome plan (see below) for down payment assistance.
- CalHFA credit with the VA. Intended for military and their dependents, this is also a 30-year fixed APR mortgage financing.
Down Payment Assistance Plans
Within the California Housing Finance Agency's catalog, there is also down payment assistance.
This type of assistance, known as a subordinate loan, is distinguished by having deferred payments. This means that you can start paying it after you have paid off your mortgage, refinanced or sold your property.
With this in mind, CalHFA offers you two options:
MyHome assistance program.
- Conventional mortgage loan. You have a deferred secondary loan to cover up to 3% of the appraised value of the property to pay down payment and/or closing costs.
- FHA-insured loan. Another deferred secondary financing that covers up to 3.5% of the appraised value of the home for your down payment and/or closing costs.
Forgivable equity builder loan
This financing considers the equity offered by your current home, which is a common form of equity building. This forgivable equity builder loan gives first-time buyers the opportunity to build value for their home from the start.
It is forgivable for those who occupy the property as their first residence for 5 continuous years.
Eligibility with the California Housing Finance Agency
CalHFA distinguishes itself by offering primary and secondary loans for low to moderate income families and down payment financing at low or zero APRs. CalHFA does not accept direct applications, so you must go to an affiliated lender to be approved.
The next step is to speak with a preferred loan officer, who will pre-qualify how much you can borrow.
You can also use the pre-qualification calculator before talking to a mortgage broker. CalHFA's Find a Loan Officer section can help you contact an expert near you.
If you are a first-time homebuyer, you must take a homebuyer education course to get certified. Once you are pre-qualified, CalHFA requires this training to help you better understand the responsibilities of homeownership. You have two options for this:
- Online. This online course lasts 8 hours and costs $99.
- In person. You can take the training through NeighborWorks America or any HUD-approved counseling agency (cost varies).
Finally, you can start looking for that house or apartment you want. Once you have it, you can make the offer through your real estate agent.
Español: ¿Qué es la California Housing Finance Agency (CalHFA)?