The Best First Time Buyer Program in California?

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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.


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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Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate
Goof for you for having an edge on your competition! I wish we had a program like that in Florida.... or do we? Hmm.
Sep 04, 2007 06:33 PM #1
Mike Mueller
Tech and Social Media Consultant - Walnut Creek, CA

Lisa - I'll bet you do.  While I can't speak to the same programs and information, this is a start.


Sep 04, 2007 06:36 PM #2
Thomas Weiss
Thomas R. Weiss - West Palm Beach, FL


That program sounds amazing, it would be nice to have something like that here, but our housing authority here in palm Beach, is Capped on everything including Funds. I find programs like the one you mentioned, to be a great source for first time home-buyers :0) Nice Job!!

I am going to check out the link you gave to Lisa..

Tom Weiss

Sep 04, 2007 06:41 PM #3
Andrew Clemente
United American Mortgage Corporation - Anaheim Hills, CA

You know Mike I can say "I wrote the book on CalHFA"  at least the Washington Mutual ("WaMu") version of it (300+ pages).  I was a Policy and Communications Writer for WaMu back in 2003-4.  Very few loan agents take the time to get to know bond programs.  The banks themselves use it to bounce off PR and obtain CRA credit but when times are tight these programs are the first to get the Axe.  Hence my entire division was let go. 

Certification is an easy process and with enough people a CalHFA Trainer will come direct to the lenders office to train.  With options limiting up gravitation to Bond Programs is a natural process. I have seen it before.  I could probably go get my old job back again (if I wanted it).  I love the sales side myself and yes I am CalHFA certified as well.  Great Post!!!

Sep 04, 2007 06:43 PM #4
Mike Mueller
Tech and Social Media Consultant - Walnut Creek, CA

Thomas - Let me know what you find out.

Andrew - of all people.  I actually have a Google search that keeps popping your name up.   It's set for Bill Clemente (a local agent)  That's cool that you wrote the book, at least for WAMU.  I was first certified years ago when the program made little sense - flash forward to today  Very different story.

Thanks for the comment!


Sep 04, 2007 08:16 PM #5
Kim Murphy
1st Advantage Mortgage / Draper and Kramer - Carol Stream, IL
Mortgage Loans in DuPage, Kane, Cook, Lake, Will C
Mike, Great information for those in California!  I know we have a bond program!  I will have to get some information together for a post! 
Sep 04, 2007 08:37 PM #6
David A. Podgursky
Boynton Beach & Lake Worth Florida Real Estate Broker Associ - Boynton Beach, FL

good information

in the midst of all this mortgage mess, people forget that some people need to buy one way or another

first time homebuyers are a market that needs the move and the programs there for them are still available at 100% and at great rates...soemtimes better than jumbo!

Sep 04, 2007 10:05 PM #7
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Mike... some great information. Most states have bond programs and first time home buyer programs.  A few questions... is this year long?  Is it based on bond money?  And you talk about low credit scores, can this be done on a conventional deal?  Or does the credit have to follow the type of mortgage program, such as conventional, FHA, and VA. And if this is the case, can you exceed the FHA loan limits in your area or do they have to follow this restriction?  thanks, jeff

jeff belonger

Sep 04, 2007 11:47 PM #8
Mike Mueller
Tech and Social Media Consultant - Walnut Creek, CA

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.


Sep 05, 2007 08:41 AM #9
Mike Mueller
Tech and Social Media Consultant - Walnut Creek, CA

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?

Sep 05, 2007 08:52 AM #10
Mary Smartt
Lawton Associates / - Berkeley, CA
Smartt Moves with Mary Smartt
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.
Sep 05, 2007 11:09 AM #11
Mike Mueller
Tech and Social Media Consultant - Walnut Creek, CA

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.


Sep 05, 2007 11:25 AM #12
Lisa Hill
Florida Property Experts - Daytona Beach, FL
Daytona Beach Real Estate
Thanks for the link. I'll check it out!
Sep 05, 2007 09:46 PM #13
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