What Is the CALHFA Down Payment Assistance Program for First Time Home Buyers?

The California Housing Finance Agency or CALHFA provides first-time home buyers with different grants for buying a home in California. Only CALHFA lenders that are participating members of this program can offer this type of down payment assistance in California to qualifying home buyers.

The CHDAP or California Homebuyers Down Payment Assistance Program provides financial assistance to those individuals who can qualify for the program.

California First Time Home Buyers Love the the CALHFA Loan

It’s no secret that many renters are unable to meet the lending requirements of homeownership. Many potential first time buyers are unable to qualify for home financing because their credit history does not meet the 2024 standards for buying a house in California. We can connect you with CALHFA lenders that offer mortgages for new home buyers.

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The second reason renters choose not to participate in the house buying process is the mere fact that they are unable to save enough money for the down-payment requirements. This is why people speak so highly of CALHFA for a down-payment, assistance on first time home buying in California. Explore the best 1st time home buyer grants in 2024.

Key Points on CalHFA Loan Program:

  • Assistance is provided for down payment and closing costs, benefiting low- to moderate-income borrowers.
  • Eligible properties include condos, manufactured homes, and those with guesthouses or in-law quarters.
  • The property must be in California and serve as the borrower’s primary residence.
  • Compliance with income and sales price criteria set by the lender and mortgage insurer is essential.
  • Completion of an approved home buyer education course and obtaining a certificate is mandatory.
  • Leaseholds/land trusts and co-ops are not allowed.

How long does it take to get approved for CalHFA?

CalHFA loanRegarding approval timelines for CalHFA, a first mortgage typically undergoes a compliance review at CalHFA, with a turnaround time of 1-2 business days.

The associated paperwork is straightforward, facilitating quick processing, and is supported by dedicated customer service.

Numerous preferred loan officers affiliated with CalHFA have successfully closed loans within a 30-day timeframe.

BD Nationwide recommends that you get your documentation organized before applying for a CALHFA loan.

How much does CalHFA give you?

CalHFA Government Loans: MyHome presents a deferred-payment junior loan, providing assistance with down payment and/or closing costs. The CALFHA loan amount is determined by the lesser of 3.5% of the purchase price or the appraised value.

About the CHDAP Home Loan

The CHDAP is classified as a “junior” loan program with a deferred payment schedule. It provides individuals with funds in the amount of 3.5% of the appraised value or purchase price of the home (whichever is less).

The funds can be applied to either the closing costs or the down-payment on this CALHFA loan, or if needed, can be applied to both. The funds can also be used in conjunction with other first-time mortgage loans whether they are CalHFA or non-CalHFA in nature. This type of down-payment assistance program offers California consumers the opportunity to secure truly affordable zero-down home loans.

Learn more about home loans for teachers in California.

Eligibility Requirements for The CALHFA First-Time Homebuyer Loan

According to the 2024 CALHFA guidelines, there are certain eligibility requirements that must be met by the borrower as well as the property in question. These requirements can be found on pages 1 and 2 of the CALHFA guidelines .pdf file entitled “California Homebuyer’s Down Payment Assistance Program (CHDAP).” Basically, the borrower must be a first-time home buyer and must use the property as their principal residence.

Additionally, their income must fall below the allowable limits of conventional, FHA, USDA, or VA first-time mortgage loans. As far as the property requirements are concerned, the structure must be a one-unit, single family residence and the price cannot exceed the CALHFA-established limits. Be aware that participating lenders will go with the more restrictive guidelines if there are any conflicting issues.

There are some other CALHFA Down Payment Assistance in California program property guidelines that need to be considered. For instance, if the property is a condominium, the buyer must meet any applicable first mortgage guidelines in order to qualify for assistance. Furthermore, manufactured housing does not qualify for the CALHFA program nor are co-ops, land trusts, and leaseholds permitted. Finally, the property size cannot exceed 5 acres.

This is not a “bad credit home loan” per se, but the credit and income guidelines are considered very reasonable by mortgage underwriting standards.

The San Diego Union Tribune published an article on how the down payment assistance programs work and how to obtain them through the California Housing Finance Agency. This exclusive CALHFA loan offer is unique to new home buyers in California. The CalHFA loan program extends a deferred-payment mortgage up to 3.5%, which can be used for lending fees, closing costs and of course the down-payment. Read more of the SD Union Tribune article.

Can you buy down the rate on CalHFA?

Yes. Permanent rate buy downs are considered on a case-by-case basis for rate-locked Calhfa loans. To explore these options, please get in touch with CalHFA’s Secondary Marketing Department at ratelocks@calhfa.ca.gov, providing the CalHFA loan ID along with your request.

What is the minimum credit score required for CalHFA loans?

The minimum credit score requirements for CalHFA conventional loan programs is 660 for borrowers with income less than or equal to the HomeReady 80% AMI LI income limit. Of course most traditional mortgage lenders that offer the CalHFA program will be expecting at least a 660 credit score, but there may be a few loan brokers that may consider lower credit scores on first time home buying programs. BD Nationwide will help you shop for the best first time home buyers loans in California and there is no fees or obligation of any kind. If you have a score below 600, ask about 1st-time home buyer loans for bad credit.

What Is the CalHFA Zero Interest Program?

The CalHFA Zero Interest Program enhances affordability for CalPLUS Conventional and CalPLUS FHA loans by covering a portion of your closing costs. This initiative offers up to 3% of the total loan amount through a no-interest second loan.

Repayment for the CalHFA Zero Interest Program loan is deferred while residing in the home, with the condition of full repayment upon selling, refinancing, transferring the title, or defaulting on the CalHFA loan.