Saturday, September 11, 2010

CalHFA Announces New 30-Year Fixed Rate FHA-Insured Mortgage for First Time Home Buyers

The California Housing Finance Agency announced a new mortgage option for first time home buyers this past week, which the department hopes "will help open the door to first time home ownership for many California families", according to CalFHA executive director Steven Spears. The new mortgage, done in partnership with the Federal Housing Administration, is a 30-year, fixed interest rate FHA-insured loan, and features below-market interest rates as well as affordable down payments. According to the California Association of Realtors, that could mean a fixed rate of approximately 4%. Borrowers are also able to use the California Homebuyers Downpayment Assistance Program (CHDAP) with this loan option, which can provide up to 3% of the purchase price to qualified borrowers for closing cost or down payment assistance.

In order to qualify for the program, borrowers must meet several eligibility requirements, including meeting CalFHA's income limits, meeting the minimum credit score requirements with maximum debt to income ratios, and completing a HUD approved first time home buyer education program, among others. Income limits vary by county - for a family of four in Los Angeles County, income must be less than $111,020 per year.

You can find more information on the CalFHA loan program HERE.

Info on the California Homebuyers Downpayment Assistance Program can be found HERE.

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