The California Housing Finance Agency (CalHFA) has launched a fixed-rate, 30-year Federal Housing Administration (FHA)-insured mortgage to help low- and moderate-income Californians purchase their first home.
The new CalHFA mortgage, done in partnership with the FHA, provides first-time buyers access to mortgages with below-market interest rates, affordable down payments and other benefits, the agency says.
‘This new program will help open the door to first-time homeownership for many California families,’ says Steven Spears, CalHFA's executive director. "With this program, CalHFA will return to being a significant provider of financing for first-time home buyers and build on our 35-year track record on behalf of more than 155,000 California families."
Under federal law, first-time home buyers are defined as not having owned and occupied a home for the past three years. In addition to first-time buyers, qualified veterans under the Heroes Earnings Assistance and Relief Tax Act are also eligible.
The CalHFA FHA program includes up-front mortgage insurance. Borrowers are eligible to use the recently improved California Homebuyer's Downpayment Assistance Program, which can provide up to 3% of the purchase price of the home for down-payment or closing-cost assistance.
Borrowers must meet CalHFA's income limits, which vary by county and family size, and purchase homes that are within the FHA's loan limits and CalHFA's sales-price limits. Mortgage loans are limited to $417,000 under FHA guidelines. CalHFA's sales-price limits vary by county.
In addition, borrowers must meet minimum credit-score requirements with maximum debt-to-income ratios, and complete a home-buyer education program approved by the U.S. Department of Housing and Urban Development.