CalHFA and California Mortgage Programs for First-time Homeowners

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As you have probably heard more than once or twice this year and right now “is the time to buy” and it is time to take advantage of the mortgage loans that are still available for those new homeowners out there looking. Be sure to do a lot of research on the area you plan to live in and make sure the mortgage payments are doable, that way you are not struggling to get by each month. And as you have probably also heard, this is the last year to take advantage of those mortgage programs aimed at helping first-time homebuyers. Taking steps toward CalHFA’s financing options and eligibility requirements

Credit Check

Check your credit report to have information before speaking to a lender. You can obtain a free copy once a year at and be sure to dispute any errors you may find.

Your credit report will assign you a Fair Isaac & Co. (FICO) credit score based on:

  • Payment history
  • Amounts owed
  • Debt
  • Length of credit history
  • New credit
  • Types of credit
  • Lenders like seeing a variety of types such as bank cards, car loans, and student loans

Figure Out Your Affordability

Figure out your financial situation and how much you are willing to pay each month. Research the housing market and go to open houses in your prospective neighborhood to have a good sense of what you can afford.

A first mortgage loan is when most people borrow a large amount of money in order to buy a home. The CalHFA has first and junior loan options for low to moderate-income families, including low to zero-interest-rate down payment assistance loans. Although programs are aimed at first-time homebuyers, you do not need to be a first-time homebuyer to use the CalHFA’s FHA and Conventional first-time mortgage loans. A CalHFA-approved Lender will qualify you for a home loan and you can find out more details here about the programs.

Reach Out to a CalHFA Preferred Loan Officer

Get pre-qualified for a loan and determine how much you can afford. Here are some eligibility requirements you can look over to give you a better idea of what is required before speaking to a lender, and when you are ready to look for a Loan Officer in your area, go here.

Most programs share some high-level, common borrower eligibility requirements. The programs may vary slightly in terms of income limits, credit scores, etc. Your loan officer can help you get more details.

Borrower eligibility requirements:

  • Must be a U.S. citizen, qualified alien, or permanent resident
  • Must meet the CalHFA requirements and lender requirements for each program (lenders add their own additional requirements which are called “lender overlays”)
  • Borrowers must complete the homebuyer education course (details listed below)
  • Some down payment assistance programs require that the borrower is a first-time home buyer (defined as not owning a home within the last 3 years)
  • You can use CalHFA’s eligibility calculator to determine what program will work for you.

Property eligibility requirements:

  • Located in California
  • Owner-occupied and primary residence
  • Sales price cannot exceed county loan limits
  • The property cannot exceed 5 acres
  • The dwelling must be a single-family residence (SFR) but the guest houses, granny units, and in-law quarters may be eligible
  • Condos and some Planned Unit Developments (PUDs) may be low-interest

CalHFA Loans

  • The CalHFA offers low-interest-rate mortgage programs and down payment assistance programs.
  • Down payment assistance programs (DAPs) –help with offsetting or completely covering the upfront costs when getting a loan
  • MyHome Assistance Program is a small loan of up to 5% of the home sale price or the appraised value (whichever one is less) and it helps cover the down payment and/ or the closing costs.
  • When MyHome is combined with the CalHFA loan:
  • The borrower takes out a CalHFA loan as a “first position lien”
  • Zero Interest Program (ZIP)
  • Zips are also an additional loan that also sits on top of the first loan. The ZIPs can be stacked on top of MyHome and you can combine all three of these loans, which are also called CalPlus loans.
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Extra Credit Teach Home Purchase Program (ECTP): is a down payment assistance program for the people who work in high-priority schools in California.

Mortgage loan programs: the types of financing that are available to consumers per CalHFA –defined guidelines

CALHFA Conventional Loans

  • CalPLUS Conventional Loan Program
  • Up to a 97% loan to value
  • Private mortgage insurance required
  • A 30-year term
  • More forgiving with the borrower’s credit scores
  • Combined with CalHFA Zero Interest Program (ZIP) which covers the down payment and/or closing costs
  • Bottom line: 0 down payment from borrower offset by slightly higher interest rate, and slightly higher mortgage rate

CalHFA Conventional Loan Program

  • Up to a 97% loan to value
  • Private mortgage insurance required
  • A 30-year term
  • Borrowers have good-excellent credit

Bottom line: Smaller down payment, a slightly lower interest rate, and a slightly lower mortgage payment

CALFHA Government-insured loans

  • Up to a 96.5% loan to value
  • Mortgage insurance is required
  • 30-year term
  • More forgiving with credit scores

Bottom line: 0 down payment from the borrower is offset by a slightly higher interest rate and a slightly higher mortgage payment


  • Mortgage insurance is required
  • 30-year term
  • More forgiving with credit scores
  • Combined with CalHFA Zero Interest Program (ZIP) covers the down payment and/or closing costs

Bottom line: smaller down payment from the borrower, a lower interest rate, and a lower mortgage payment

Cal-EEM + Grant Program: This loan combines an FHA-insured mortgage with an additional grant. However, the proceeds must be used to improve energy efficiency when you buy a property. This means you must spend money on things such as insulation, a new HVAC system, weatherization, solar panels, etc.

Extra Credit Teacher Home Purchase Program (ECTP): The ECTP assists eligible teachers, administrators, classified employees, and staff members (who work in California schools) with the down payment and closing costs.

A Homebuyer Education Requirement

When the borrower or one of the borrowers as long as there is more than one is a first-time homebuyer, they must take a homebuyer education course. This course can conveniently be taken online. It is an 8-hour course and you will receive a certificate of completion after it is completed. There are also local, in-person course options.

Online: eHome’s eight-hour Homebuyer Education course online (fee: $99)

In-person: a face-to-face Homebuyer Education through NeighborWorks America/ through any HUD-Approved Housing Counseling Agency (fee: varies by agency)

Make a List of Your Needs and Wants

Start a list of what you really want and need, how many bedrooms, and bathrooms, decide on how much space you want, and discover some of your needs and wants. It will be easier as you start your searching, you will be able to determine what things you love or hate.

Start Your Search

Get a better knowledge of the area or areas you would like to live in, take a look at listings online and get an agent to help guide you through tours.

Make the Best Offer

Work with your agent on understanding the market and guiding you to make the best offer. And make sure to figure out any contingencies or whether or not you will require an inspection and when you submit the offer, then you wait to hear either a counteroffer or a straight “no” and the search for your home will continue.