How to Get an FHA Loan in California Through the CalHFA FHA Program
Navigating the home-buying process can be challenging, especially for first-time buyers. Fortunately, the CalHFA FHA Program offers a streamlined pathway to homeownership in California. This comprehensive guide will walk you through each step to secure an FHA loan through CalHFA and explore additional loan programs available to you.
Step-by-Step Guide to Securing an FHA Loan
1. Check Your Eligibility
For Borrowers:
- Primary Residence: You must live in the home you purchase as your primary residence.
- Income Limits: Ensure your income does not exceed the CalHFA program limits for your county.
For Properties:
- Type: Eligible properties include single-family homes, approved condominiums, and Planned Unit Developments (PUDs). Manufactured homes are also allowed under the program.
2. Complete Homebuyer Education
Only one occupying first-time borrower needs to fulfill this requirement. You have two convenient options:
- Online Course: eHome offers an eight-hour Homebuyer Education and Counseling course for $99.
- In-person or Virtual: Courses are available through NeighborWorks America or a HUD-Approved Housing Counseling Agency, with fees varying by provider.
3. Gather Necessary Documents
Preparation is key to a smooth application process. Ensure you have:
- Pay Stubs
- Bank Statements
- Employment History
- Previous Tax Returns
4. Find a CalHFA-Approved Loan Officer
CalHFA collaborates with approved lenders to qualify borrowers. To find a loan officer:
- Visit the “Find a Loan Officer” tab on the CalHFA website.
- Select and contact a loan officer in your area to assist you.
5. Apply for the Loan
Work with your chosen loan officer to:
- Obtain an accurate interest rate quote.
- Complete the loan application process efficiently.
6. Submit Your Application and Await Approval
After submitting your application, your loan officer will:
- Guide you through any additional requirements or documentation.
- Keep you informed throughout the approval process.
Important: CalHFA does not directly lend money to consumers. Instead, they work with approved lenders to qualify borrowers and make mortgage loans. Your loan officer will be your primary point of contact for detailed information about interest rates, fees, and specific requirements.
CalHFA Loan Programs
CalHFA primarily focuses on assisting low to moderate-income homebuyers. However, some programs might be relevant for higher-income buyers, depending on specific circumstances and eligibility criteria. Here are the key programs offered by CalHFA:
First Mortgage Programs
1. CalHFA FHA Loan Program
- A 30-year fixed interest rate first mortgage insured by the Federal Housing Administration (FHA).
2. CalPLUS FHA Loan Program
- Similar to the CalHFA FHA Loan but with a slightly higher interest rate. It includes the CalHFA Zero Interest Program (ZIP) for closing costs.
3. CalHFA VA Loan Program
- A VA-insured loan with a fixed interest rate for eligible veterans and active-duty service members.
4. CalHFA USDA Program
- A USDA Guaranteed first mortgage loan program, which can be combined with the MyHome Assistance Program for down payment assistance.
5. CalHFA Conventional Loan Program
- A conventional first mortgage insured through private mortgage insurance with a fixed interest rate.
6. CalPLUS Conventional Loan Program
- Similar to the CalHFA Conventional Loan but with a slightly higher interest rate, combined with the CalHFA Zero Interest Program (ZIP) for closing costs.
Down Payment Assistance Programs
1. California Dream For All Shared Appreciation Loan
- Provides up to 20% of the home purchase price for down payment or closing costs, with repayment tied to a share of the home's appreciation upon sale or transfer. This program requires registration and a randomized drawing to receive a voucher.
2. MyHome Assistance Program
- Offers a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value for FHA loans, and up to 3% for conventional, VA, or USDA loans. This program is designed to assist with down payment and closing costs.
Income Limits and Eligibility
- Income Limits: CalHFA sets income limits that vary by county and program. These limits are designed to ensure that assistance is provided to low to moderate-income homebuyers. Specific income limits can be found on the CalHFA website.
- Eligibility: Most programs require that the homebuyer be a first-time buyer, occupy the property as their primary residence, and complete a homebuyer education course.
Special Considerations for Higher-Income Buyers
While CalHFA programs are primarily targeted at low to moderate-income buyers, higher-income buyers might still benefit from some of the programs, particularly if they fall within the upper range of the income limits for their county. Additionally, the California Dream For All Shared Appreciation Loan provides substantial assistance for down payments and closing costs, which could benefit buyers with higher incomes who meet the specific eligibility criteria.
For detailed information and to determine eligibility, it is recommended to contact a CalHFA-approved lender or visit the CalHFA website to explore the specific income limits and program details for your county.
For more detailed information, visit the CalHFA FHA Program page
By following these steps, you can confidently navigate the FHA loan process and move closer to owning your home in California.
Citations:
[1] https://www.calhfa.ca.gov/homebuyer/programs/index.htm
[2] https://themortgagereports.com/77361/california-first-time-home-buyer-programs-grants
[3] https://www.calhfa.ca.gov/homeownership/limits/index.htm
