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CHFA Mortgage loans

The CHFA, or "CHAFA" is also known as, is operated by the California Housing Finance Authority. These loans are monitored by California Housing Finance Authority enables low cost financing up to one hundred percent for eligible 1st time homebuyers. The traditional CHFA mortgage is offered at ninety seven percent with a thirty-year term and CHFA aids with the 3% down payment assistance in the form of a 2nd mortgage which typically is also fixed for 30 years, but at a discounted 3%. The CHFA 100% Home Loan Program is available to all low-income homebuyers in all 58 counties in California. Home loans with no down-payment are not easy to find in today's economic climate. Besides the CHFA, the other 100% home loans available are from the USDA and the VA.

In order to qualify for a CHFA mortgage, the borrower must meet certain requirements; the following eligibility must be met.

  • Annual household/family income that does not exceed income limits for the family size and county in which the property is located.
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  • Home being purchased must be owner-occupied for the term of the loan or until sold. 
  • Qualify with income and credit requirements of the mortgage insurer and lender.
  • Be a first-time homebuyer, which is defined as a person(s) who has not had an ownership interest in their primary residence during the previous three years.
  • Have sufficient assets with savings available to meet the down-payment requirement that ranges from 3 to 5 percent plus closing costs. In some cases there may be some gift funds limitations.
  • Have the legal right to permanently reside in the United States.

CHFA Mortgage loans with FHA by Jean Pryor

Are you a first-time home buyer? Now is the time to buy, and there are great programs to help you if you are strapped for cash. A loan program that you should seriously consider is the CHFA mortgage loans with Federal Housing Administration (FHA).

These CHFA loans are offered by California Housing Finance Authority (CalHFA). These unique FHA loans provide low cost home financing from 97-100% for eligible 1st time homebuyers. The traditional CHFA mortgage is offered at ninety seven percent with a thirty-year term and CHFA aids with the 3% down payment assistance in the form of a 2nd mortgage which typically is also fixed for 30 years, but at a discounted 3%.

The mission of the Homeownership Division of the California Housing Finance Agency is to provide affordable housing opportunity to low- and moderate-income first-time buyers. This is accomplished by offering low, fixed interest rate mortgage products, along with down payment and closing cost assistance through its CHFA Loan Program.

The CHFA Loan Program is available to all low-income homebuyers in all 58 counties in California. CHFA mortgages may be subject to a Federal recapture tax. Recapture is a Federal income tax that borrowers may have to pay if they sell or transfer their CHFA-financed home within nine years.

Borrower Eligibility

To be eligible for a CalHFA CHFA loan, a buyer must:

  • Be a citizen or other national of the United States or a qualified alien as defined by the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).
  • Be a first-time homebuyer, which is defined as a person(s) who has not had an ownership interest in their primary residence during the previous three years.
  • Have an annual household/family income that does not exceed income limits for the family size and county in which the home is located.
  • Occupy the property as their primary residence; non-occupant co-borrowers are not allowed.
  • Meet credit, income and loan requirements of the CalHFA lender and the mortgage insurer (FHA, VA or USDA).

Property Eligibility

Properties must meet all of the following requirements:

  • Sales price of the home cannot exceed CalHFA’s sales price limits established for the county in which the borrower is purchasing.
  • Be a single-family, one-unit residence, including condominium /Planned Unit Development (PUD).
  • Manufactured housing must meet eligibility requirements.
  • Meet the requirements of the mortgage insurer/guarantor (FHA, VA or USDA).

The loan limit for the CHFA loans is the maximum as allowed by mortgage insurer, subject to borrower credit eligibility. Maximum combined loan-to-value (CLTV) of 102% to include FHA-financed mortgage insurance premium (MIP) or VA funding fee.

Subordinate Financing

You can also get subordinate financing (a second loan) to help with the down payment. This program may be combined with the following subordinate financing options:

  • CalHFA Housing Assistance Program (CHAP)
  • California Homebuyer’s Downpayment Assistance Program (CHDAP)*
  • Extra Credit Teacher Program (ECTP)*
  • Affordable Housing Partnership Program (AHPP)
  • School Facility Fee Down Payment Assistance Program (SFF)

*Only eligible for one program per transaction (CHDAP or ECTP)

Under no circumstances can the CLTV (including FHA-financed MIP or VA funding fee) exceed 102% when utilizing any combination of CalHFA first mortgage loans and subordinate loan products or approved programs.

CalHFA does not lend money directly to consumers. CalHFA works through and uses approved private lenders to qualify consumers and to make all mortgage loans. CalHFA purchases closed loans that meet CalHFA's requirements. The fees consumers pay could be different depending on the lender and the program. Call us if you have questions about the CFHA loans. These loans, like other government-backed loans have less stringent qualification criteria than conventional loans sold to Fannie Mae and Freddie Mac, so you could qualify. We’ll be happy to help you in any way we can. Call us.

 

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All FHA mortgage products are provided by FHA Home Loan Services, which may arrange loans with third party providers. FHA Home Loan Services is national mortgage lender. Not everyone will qualify for a government insured mortgage. FHA Home Loan Services cannot guarantee all loans will be made or whether all loan applications will be approved by the investing bank.
This is not a commitment for a FHA house loan or an advertisement for credit as defined by paragraph 226.24 of regulation Z.
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