CalHFA FHA Loan Program: A Path to Homeownership in California

Buying a home for the first time can be both exciting and overwhelming. If you’re in California, you’re in luck! There are several programs designed to help first-time homebuyers, and one of the most popular ones is the CalHFA FHA Loan Program. Let me walk you through the details so you can decide if this is the right fit for you.

What is the CalHFA FHA Loan Program?

The CalHFA FHA Loan Program is a special mortgage product backed by the California Housing Finance Agency (CalHFA) and insured by the Federal Housing Administration (FHA). It’s designed to make the dream of homeownership more accessible to low and moderate-income buyers, especially if you’re just starting out and don’t have a huge down payment saved up.

How It Works

This loan offers competitive interest rates and allows for a lower down payment (as low as 3.5% of the home’s purchase price). Unlike some conventional loans that require perfect credit, the CalHFA FHA Loan Program is more flexible with credit scores, making it a good option if your credit isn’t pristine.

Eligibility Criteria

• First-time homebuyer: You must be a first-time buyer, which means you haven’t owned and occupied a home in the past three years.
• California resident: You must be purchasing a home in California.
• Income limits: Your income must fall within the CalHFA’s limits, which vary by county.
• Credit score: A minimum credit score of 660 is required.
• Occupancy requirement: The home must be your primary residence.
• Homebuyer education: You’ll need to complete a CalHFA-approved homebuyer education course.

Program Benefits

• Low down payment: You only need to come up with 3.5% of the purchase price for a down payment.
• Flexible credit requirements: Qualify with a credit score as low as 660.
• Down payment and closing cost assistance: Can be paired with other CalHFA programs.

Potential Drawbacks

• Mortgage insurance premiums (MIP): You’ll need to pay upfront and annual premiums.
• Loan limits: FHA loan limits may restrict your home choices in expensive areas.
• Income limits: Some buyers may be disqualified if their income exceeds local limits.

How to Apply

1. Find a CalHFA-approved lender: Locate a lender who works with CalHFA loans.
2. Get pre-approved: The lender will review your financial information.
3. Take the homebuyer education course: Complete the required course online.
4. Submit your application: Your lender will help you submit your loan application for approval.

Geographic Availability

The CalHFA FHA Loan Program is available exclusively in California. You must be buying a home in the state, and the program can be used across all counties in California.

Sources

• CalHFA Official FHA Loan Program Details
• Federal Housing Administration (FHA) Information