Since 1975, the California Housing Finance Agency, also known as CalHFA, has offered home loan financing and assistance programs for low-to-moderate-income California residents.
CalHFA is a state agency operating on funds raised through its mortgage loan programs rather than taxpayer dollars. CalHFA mortgage programs include conventional mortgages and government-backed loans offered through a network of participating lenders working with CalHFA.
CalHFA programs typically offer some benefit for the borrower such as low or no down payments, and depending on the program the ability to combine the loan with other CalHFA options for closing costs and/or down payment assistance. CalHFA loans typically feature income restrictions and may require you to purchase in an approved area in some cases.
California Mortgage Programs
There are a variety of home loan options under CalHFA. There are two conventional loan options and four different government loan programs represented below. Each of these loan programs may have different features, requirements, income limits, or other variables.
The programs are not necessarily interchangeable, and not all programs below are open to all applicants. The VA loan option, for example, is generally offered only for those with qualifying military service or who apply as qualifying surviving spouses of military members.
The details of these programs are current at press time. State law, changes in agency policy, housing market conditions or other variables may affect certain terms or conditions. Always check with CalHFA guidelines for the most current information before committing.
CalHFA Conventional Loan Program
The CalHFA Conventional mortgage is a fixed-rate, 30-year loan program offered to low-and-moderate-income borrowers who meet CalHFA income limits, which vary by county. These loans are offered to purchase single-family, one-unit homes.
Property types may include guest houses, “mother-in-law apartments”, condo units, and planned unit developments.
This program works thanks to a network of participating lenders; borrowers must select a lender, and meet that lender’s other financial requirements in addition to the CalHFA program’s guidelines. Homebuyer education is required.
This loan program is for owner-occupiers, no investment properties are allowed.
CalPLUS Conventional Loan Program
The CalPLUS Conventional program is a fixed-rate conventional first mortgage. This loan has a “slightly higher” 30-year interest rate than CalHFA’s other conventional program (listed above) but this loan is included with the CalHFA Zero Interest Program (ZIP) which offers help with closing costs.
That assistance includes a deferred, no-interest junior lien for up to three percent of the first mortgage. Property types are identical to the CalHFA program listed above including condos, planned unit developments, etc.
Homebuyer education is required and this loan is for owner-occupiers only.
CalHFA FHA Loan Program
The CalHFA FHA loan program is an FHA-insured loan offered by CalHFA participating lenders. These loans are 30-year fixed-rate FHA loans for owner-occupiers. Like other CalHFA programs, homebuyer education is required, income limits may apply, and the following housing types qualify:
- Condos
- Mobile homes/manufactured homes
- Granny flats/mother-in-law apartments
- Guest houses
FHA loans typically require 3.5% down, but the participating CalHFA lender may have additional standards. FHA loan down payments are separate from other closing costs.
CalPLUS FHA Loan Program
The CalPLUS FHA program features an FHA-insured first mortgage. This loan has a “slightly higher” 30-year fixed interest rate than the other CalHFA FHA loan program but this loan is combined with the CalHFA Zero Interest Program which can help offset closing costs.
CalHFA FHA Plus loans are for owner-occupiers, have a homebuyer education requirement, and income limits may apply. You may be able to use these loans for the following housing types including typical suburban homes as well as:
- Condos
- Mobile homes/manufactured homes
- Granny flats/mother-in-law apartments
- Guest houses
FHA loans typically require 3.5% down, but the participating CalHFA lender may have additional standards. FHA loan down payments are separate from other closing costs.
CalHFA VA Loan Program
The CalHFA VA loan is a 30-year fixed-interest rate mortgage offered to those who are eligible for the VA home loan program. If you cannot qualify to receive a VA Certificate of Eligibility after serving a minimum amount of military service (or as a qualifying surviving spouse of a military member who died as a result of military service), you will not qualify for a CalHFA VA loan.
These are 30-year mortgages for primary residences and non-occupying co-borrowers are not permitted. These loans require occupancy, income limits may apply and you will be required to present a VA Certificate of Eligibility.
If you do not have one but qualify to receive one, your participating CalHFA lender can help you obtain one from the Department of Veterans Affairs.
These loans can be used for typical suburban homes, but also for condos, guest houses, granny flats, and more. Manufactured housing is not allowed under this program though you can typically use a VA mortgage to buy one from a VA lender.
If you are determined to buy a manufactured home you may wish to explore one of the other CalHFA programs listed here.
VA mortgages typically feature no down payment requirement but you may be required to make a down payment if your FICO scores are marginal or if you are purchasing a home where the appraised value comes in lower than the asking price of the property. In such cases you may not be allowed to finance the difference, it must be paid in cash at closing time.
CalHFA USDA Program
The CalHFA USDA Program features a USDA mortgage which may be combined with the CalHFA MyHome Assistance Program. The MyHome program is for first-time homebuyers only, and is offered to help offset closing costs and down payment expenses.
CalFHA and USDA both feature income limits and other restrictions. In some cases, one program may have higher standards than the other. Under the CalHFA USDA loan program, the more restrictive rule applies.
These loans are for owner-occupiers only, no non-occupant co-borrowers. You may be restricted in the ability to rent out a portion of your home under this program; check current USDA and CalHFA guidelines if this may apply to you. Both CalHFA and USDA guidelines for purchases include the ability to buy condos, manufactured housing, guest houses, granny flats, etc.
For this CalHFA program, the home must be in an area declared eligible for a USDA loan. USDA loans typically feature a zero-down option. Discuss this no-down payment feature with your participating lender; you may find an advantage to making a down payment if you can afford it.
Documents To Have Ready To Apply For A CalHFA Mortgage
When you are ready to apply or prequalify for a CalHFA loan, it’s a good idea to have certain documents ready to submit online or in person. They include but are not limited to:
- Pay statements
- Bank account information
- Employment history
- Previous tax returns for the last two years minimum
If you do not live alone you may need to provide documentation on your total household income. Depending on the type of home loan or down payment assistance you seek through CalHFA you may be required to certify you plan to use the home as your primary residence and you will also need to check with your loan officer for any unique requirements that financial institution may have on top of CalHFA requirements.
It will also help to know your credit score ranges and how long you have been working full-time. You’ll want to consider a price range you feel you can afford as well as any possible down payment you anticipate being able to make.