CalHFA School Teacher and Employee Assistance Program (School Program)

Hey there! If you’re a teacher or school employee in California, I’ve got some great news. Buying your first home in this state, especially in high-cost areas, can be tough, but there’s a program specifically designed to help educators and school staff get their foot in the door. It’s called the CalHFA School Teacher and Employee Assistance Program (commonly known as the School Program), and it’s all about giving educators a little extra support on their journey to homeownership.

Let’s dive into what this program is all about and how it can help you!

What is the CalHFA School Program?

The California Housing Finance Agency (CalHFA) created this program to provide down payment and closing cost assistance to eligible school employees. The idea is to make buying a home more affordable by offering financial aid that doesn’t need to be repaid right away.

Whether you’re a full-time teacher, administrator, or classified school employee (like custodians, bus drivers, or office staff), this program is here to assist you if you’re working in a K-12 public school, charter school, county/continuation school, or even the school district office.

Funding Source

This program is backed by the California Housing Finance Agency (CalHFA), which is funded through the sale of tax-exempt government bonds.

Key Benefits

• Down Payment Assistance: One of the biggest hurdles to homeownership is saving up for a down payment, especially in California. The School Program helps cover your down payment with up to 3.5% of the home’s purchase price.
• Closing Cost Help: In addition to the down payment, you can also get help covering your closing costs. The funds come as a deferred-payment junior loan, meaning you don’t have to start paying it back until you sell, refinance, or pay off the home.
• Combines with CalHFA First Mortgage: You can combine this program with one of CalHFA’s first mortgage loans, giving you a complete financing package.

Who is Eligible?

To qualify for this program, you need to meet a few requirements:

1. First-time Home Buyer: You must be a first-time home buyer, which is generally defined as someone who hasn’t owned a home in the last three years.
2. Employment in K-12 School System: You must be a teacher, administrator, or classified employee (such as a librarian, janitor, or school bus driver) in a California K-12 public school or public charter school.
3. Income Limits: There are income limits based on the county where you’re buying. These limits can vary, but they are set to ensure that the program is helping middle-to-low-income school employees.
4. Creditworthiness: Like any loan, you’ll need to meet certain credit and debt-to-income ratio requirements. For CalHFA first mortgage loans, a credit score of 660 or higher is generally required.

Pros and Cons of the School Program

Pros:

• Significant Financial Assistance: The 3.5% down payment assistance is a game-changer for educators who may struggle to save that much cash.
• No Immediate Repayment: The deferred payment on the loan means you won’t feel the financial burden of the assistance until much later.
• Supports a Wide Range of School Employees: This program isn’t just for teachers but extends to almost anyone working in a public school, which opens up the opportunity to more people.

Cons:

• Limited to California: While this is great for residents of the Golden State, if you plan to work in another state or move, this won’t be useful.
• Income Limits: Depending on where you work and the cost of living in your area, the income limits may exclude some educators, particularly those with higher salaries in more affluent districts.
• Loan Tied to the First Mortgage: You must pair this assistance with a CalHFA first mortgage, which might not always offer the lowest interest rates compared to other options.

How to Apply

If you’re interested in applying, here’s what you need to do:

1. Take the First-Time Home Buyer Education Course: Before anything, you’ll need to complete a homebuyer education and counseling course, which can usually be done online. It’s required for anyone using a CalHFA program.
2. Find a CalHFA-Approved Lender: You’ll need to work with a lender who is approved by CalHFA. They will guide you through the mortgage process and help you apply for the School Program assistance.
3. Submit Your Application: The lender will submit your application for both the mortgage and the down payment/closing cost assistance.
4. Get Pre-Approved: It’s a good idea to get pre-approved for a loan so you know how much house you can afford before you start shopping.

Final Thoughts

The CalHFA School Teacher and Employee Assistance Program is a great way for school staff to get some much-needed financial help when buying their first home. It’s designed to ease the financial burden of both the down payment and closing costs, making homeownership more attainable for the hardworking educators and support staff who keep California’s schools running smoothly.

If you’re eligible, this program could be the extra boost you need to turn your dream of owning a home into a reality!

Availability

Location: California (statewide program).

Sources

• CalHFA – School Teacher and Employee Assistance Program
• CalHFA Approved Lender List