The Best First Time Buyer Program in California?

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Education & Training with Tech and Social Media Consultant

The Best First Time Buyer Program in California

best_mortgage How would you like to buy a $670,000 home here in California as a First Time Homebuyer? Low Credit Score? Nothing Down? Not much in the bank account? At a Great Rate? Is that too much to ask for?

Impossible you say?

I don't think so. This program is just for you.

How does 100% financing sound? Can we cover all your closing costs too? How about if this was also backed by a secure government agency?

That sounds contradictory to everything you are hearing in the news doesn't it? Nationwide, we are seeing alarming increases of mortgage defaults. Lenders are forced to shut their doors overnight or at a minimum create only new loans with much stricter guidelines and higher rates. The secondary mortgage markets don't want to buy pools of mortgages from lenders because of these defaults. Who could blame them?

Those astute enough will be quick to point out that FHA and VA guarantee the performance of their loans. Both of those entities are government programs. FHA will take you to 97%, VA will get you to 100% but certain restrictions apply.

So why is this new program, The Best First Time Buyer Program Ever?

First of all, it's not new. It's been around since 1975. It's called CalHFA, it stands for California Housing Finance Agency.

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CalHFA is a California agency that provides financial backing not by reselling their loans on the secondary mortgage market but by selling tax exempt Mortgage Revenue Bonds.

For in depth reading, try Freddie Mac's page on MRB's. To learn more about Mortgage Backed securities, try this page from the S.E.C. There is a lot of highly detailed information out there.

Better yet, here's the beef. CalHFA will allow you to buy a home with a lower credit score, no money down, and help pay your closing costs. They can do it with an FHA loan, a V.A. loan, a conventional conforming loan (Fannie Mae or Freddie Mac), and they can do it with a Jumbo loan (over $417,000).

  • First Time Home Buyer is anyone who has not owned in the last 3 years.
  • Just a 620 middle Credit Score - a 720 score is required by many of those other "traditional" for 100% financing.
  • Great Rates - Here's today's rates
  • Great Programs, 30 Year Fixed, 40 Year Fixed, Interest Only.
  • Down Payment Assistance, $7,500 and 3% of the sales price (all deferred for the term of the loan)

If the property is in a designated area, or you work for a school, the benefits could be much much better.

There's one catch. Per the CalHFA website, "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."

You need to work with a mortgage professional that is certified to complete these special programs. Unfortunately very few mortgage originators are certified for CalHFA loans.

I am - Just give me a call. (925) 288-9977 Ext. 104

 
 
 
 
 
 
 
 
 
 
 
 
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Location:
California Contra Costa County
Tags:
100 financing
cal hfa
calhfa
fha loans
no money down

Comments 13 New Comment

Rainmaker
304,669
Mike Mueller
Tech and Social Media Consultant

Kim - Put one together, I'll be looking for it. 

David - Check this out.  On this program there is no bump for Jumbos, they get the same rate!  So the best deal you can get on a Jumbo is this program (as long as it fits into the limits and restrictions)

Jeff - Great questions.  All year long.  Bonds, yes.  Credit - 620 minimum.  It's a hard line in the sand.  Other guidelines follow the findings of the underlying body, so if Fannie findings say No Reserves they follow that. Conventional, FHA or VA are all ok.  If you exceed the FHA limit (as you would for most anything in my area) you have to go conventional.  You can DU and get a Accept / Ineligible and that's ok too.  (In the case of a loan over $417,000). 

My limit for a normal family in Contra Costa is a little over $670,000 sales price, with an income ceiling of $111,000 per year combined.  That covers pretty much most first time buyers in my area.

 

September 05, 2007 08:54 AM
Rainmaker
304,669
Mike Mueller
Tech and Social Media Consultant

Jeff II - I almost forgot.  If FHA does increase the limits, while they do not have a minimum credit score rule, CalHFA does stick to the 620 minimum.  BK is ok, 3 yrs discharged.

What else did I forget?


September 05, 2007 08:52 AM
Rainer
29,049
Mary Smartt
Smartt Moves with Mary Smartt
Lawton Associates / www.LawtonAssociates.com
Hey Mike~Thanks for reminding people of the "oldies but goodies."  I encourage all of my clients, especially first time home buyers, to look into programs like this.
September 05, 2007 11:09 AM
Rainmaker
304,669
Mike Mueller
Tech and Social Media Consultant

Mary - Here's the problem I've been seeing in our area.  If the client goes to a loan officer that hasn't been around for a while, they've probably never heard of it.  By the way, the very first loan I did as a residential loan officer was a FHA.  Those were the days.  Perhaps they are making a comeback.

 

September 05, 2007 11:25 AM
Rainmaker
592,509
Lisa Hill
Daytona Beach Real Estate
Florida Property Experts
Thanks for the link. I'll check it out!
September 05, 2007 09:46 PM
Rainmaker
304,669

Mike Mueller

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