CalHFA Down Payment Assistance

Down Payment Assistance

TRADMOR has the CalHFA Down Payment Assistance (DPA) program as well as other DPA programs available for your new home purchase.

As of May 2018 the CalHFA program allows for purchases of up to $660,000, but the real sweet spot for the program is for conventional purchase prices up to $467,000.

For the example below we are going to take a look at an example purchase price of $400,000 and the rates shown are accurate as of 5/22/18.  If you need to get a current rate from us for this program please contact us through this web site or feel free to call us at 925-317-1500.

CalHFA Down Payment Assistance Combinations

  1. The CalHFA program allows for a first mortgage either for a Conforming loan program or an FHA loan program.  These offer loan-to-values of 97%, 96.5% or 95% depending on the specifics of the transaction.
  2. They provide a second mortgage for 3.5% or 4% of the purchase price.  This loan can be used for down payment and if any is left after the down payment the remaining amount can be used to pay closing costs.  You can only use ONE of these programs for your 2nd mortgage.  The two programs are:
    MyHome Assistance:  Available to anyone in California who qualifies for the CalHFA program.  This is for up to 3.5% of the purchase price for down payment and closing cost assistance.
    Schools Program:  Available to educators who qualify for the program and this is for up to 4% of the purchase price.  This can also be used for down payment and closing cost assistance.
  3. The Interest Free ZIP (Zero Interest Program)  is a loan with no interest and no payments in third position.  It can be for up to 3% or 4% of the purchase price depending on the option selected.  This loan will be paid off in the future when you sell or refinance your home.  PLEASE NOTE:  The rate on the first mortgage will be higher when you use a ZIP third mortgage.

CalHFA Down Payment Assistance Purchase Example:

This sample is taken from the CalHFA web site based on a $400,000 purchase price and the first loan amount of $388,000.  This is for someone who is not a teacher and doesn’t qualify for the Schools program.

The Rate on the first is 5.75% with an APR of 6.92%
The Rate and APR on the second mortgage are 2.50%
The 3rd mortgage has a 0% rate and APR

Total First Loan Amount  97% LTV
$388,000.00
MyHome Amount (2nd Lien Position Required)
$14,000.00
ZIP Loan Amount (3rd Lien Position Required)
$15,520.00
$15,520.00 of ZIP Loan funds can only apply to closing cost

Total Financing From CalHFA 104.38% CLTV
$417,520.00

Borrower’s Estimated Contribution
$1,210.00

Monthly P & I Payment (Term: 360 Months)
$2,264.26
Estimated Monthly Mortgage Insurance Premium
(Scheduled Ending Month: 135 )
$210.17
Estimated Monthly Property Taxes
$416.67
Estimated Monthly Hazard Insurance Payment
$100.00

Total Estimated Monthly Housing Payments
$2,991.10
The total closing costs will vary greatly based on the month of the year because they include the requirement to fund your impound account for taxes and insurance.
In this example the buyers would have to come in with a total of $1,210 cash to close on a $400,000 home purchase.
PLEASE NOTE:  The seller can also contribute up to 3% of the purchase price on a conventional transaction to cover closing costs and prepaid items.  With a seller contribution it would be possible to but this home with nothing out of pocket.
If you have additional questions we are available to answer or you can also browse the state’s web site for this program at:  http://www.calhfa.ca.gov/