Hey there! I know that diving into the world of home buying can feel a bit overwhelming, especially with all the different loan options out there. But don’t worry—I’m here to help simplify things for you. Let’s chat about the CalHFA Conventional Loan Program, a fantastic option for first-time homebuyers in California.

What Is the CalHFA Conventional Loan Program?

The California Housing Finance Agency (CalHFA) offers the CalHFA Conventional Loan Program, which is a 30-year fixed-rate mortgage insured through private mortgage insurance. It’s designed to make homeownership more accessible and affordable for first-time buyers like you.

Funding Source

This program is funded by CalHFA through the sale of taxable and tax-exempt bonds, enabling them to offer competitive interest rates to eligible borrowers.

Eligibility Criteria

To qualify for this program, you’ll need to meet certain requirements:

• First-Time Homebuyer Status: You should not have owned and occupied a home in the past three years.
• Income Limits: Your income must fall within CalHFA’s specified limits, which vary by county. Check income limits here.
• Credit Score: A minimum credit score of 680 is required. However, if your income is less than or equal to Fannie Mae’s HomeReady 80% Area Median Income (AMI) limit, the minimum credit score requirement is 660.
• Debt-to-Income Ratio (DTI): Your total DTI ratio should not exceed 45% if your credit score is between 680 and 699. For credit scores of 700 or higher, the maximum DTI is 50%.
• Occupancy: You must occupy the purchased property as your primary residence. Non-occupant co-borrowers are not allowed.

Benefits

• Fixed Interest Rate: Enjoy the stability of a fixed interest rate over the 30-year term, making it easier to plan your finances.
• Down Payment Assistance: You can combine this loan with CalHFA’s MyHome Assistance Program, which offers a deferred-payment junior loan of up to 3% of the purchase price or appraised value to assist with down payment and/or closing costs.
• Homebuyer Education: To prepare you for homeownership, this program requires completion of a homebuyer education course. You can complete it online through eHome America.

Potential Drawbacks

• Strict Eligibility Requirements: Income and credit score limits may exclude some applicants.
• Primary Residence Requirement: Investment properties are not allowed.
• Education Course Requirement: While helpful, some may find the mandatory course an extra step in the process.

Application Process

Applying for the CalHFA Conventional Loan Program is straightforward:

1. Find a CalHFA-approved lender. You can locate one through their approved lender list.
2. Complete a pre-approval process with the lender.
3. Finish the required homebuyer education course.
4. Work with your lender to submit the application and necessary documentation.

Program Type

This program provides a mortgage loan, but it can be paired with down payment assistance through CalHFA’s MyHome Assistance Program for additional support.

Final Thoughts

The CalHFA Conventional Loan Program is a fantastic resource for first-time homebuyers in California. It offers low-interest rates, stability, and options for down payment assistance. If you’re ready to take the next step toward homeownership, this program could be the key to making your dream home a reality!

Additional Resources

• CalHFA Conventional Loan Program Details
• Find an Approved Lender
• Homebuyer Education Course

Category: California