6 minute read
Mortgage Assistance programs by GSFA and CALFHA.
Owning a home especially at this age can be a great accomplishment. The country is dealing with a severe shortage of homes, and everywhere, home prices are reaching new highs. While owning a home can bring a sense of pride and accomplishment, it can also be a huge responsibility. There are so many issues that you have to take care of each month, and if you ask many homeowners, dealing with all these costs can be draining. In addition to the repair and maintenance costs, as a homeowner, you have to constantly worry about mortgage payments and all the interests added to your mortgage loan every day. I don’t mean to scare you about homeownership, but it is extremely important you are fully aware of what you are getting yourself into. Today, especially because of the COVID-19, it is so easy to fall behind on your mortgage. But thankfully, there are so many federal, state, and private mortgage assistance programs that you can take advantage of today and avert the crisis of being foreclosed.
Today, we will delve into the mortgage assistance programs from the Golden State Finance Authority (GSFA) and the California Housing Finance Agency (CalHFA).
MORTGAGE ASSISTANCE FROM GOLDEN STATE FINANCE AUTHORITY
California’s Golden State Finance Authority (GSFA) created the Platinum Program, which provides low-tomoderate income California homebuyers with down
MORTGAGE ASSISTANCE PROGRAMS BY GSFA AND CALHFA
AVAILABLE ASSISTANCE
GSFA’s Platinum Program provides applicants with down payment and/or closing cost assistance in the form of a non-repayable grant up to 5 percent of the total loan amount. This is a gift in the true sense, which means it is not a second mortgage, does not create a lien against the property, and there are no terms for repayment.
The purpose of this program is to make funds available to eligible applicants who are interested in purchasing a home but need financial help to pay the upfront costs, which include the down payment, as well as the closing costs and prepaid items required to obtain homeownership. These expenses can add up to a substantial amount, and the inability to pay it might keep people stuck in a renters trap.
ELIGIBILITY REQUIREMENTS
The GSFA Platinum Program has certain requirements that all applicants must meet to be considered eligible for assistance. Any home being purchased under the program must serve as the applicant’s primary residence; the program is designed to help individuals purchase homes, not investment properties. Additionally, all applicants must fall under the Program’s Income Limits, have a credit score of at least 640, and a maximum debt-to-income ratio of 50 percent. Unlike most down payment assistance programs, there is no requirement for applicants to be first-time homebuyers.
PROPERTY GUIDELINES
The program is meant to be flexible; it can be used to buy both new and existing homes, as long as it is the applicant’s primary residence.
*Seller-funded down payment programs were eliminated in the Housing and Economic Recovery Act of 2008, but state and Local government agencies are still permitted to help borrowers finance their homes with second mortgages and grants. These agencies set different requirements that a borrower needs to meet in order to qualify for the grant programs, such as property location, and purchase price, and income limits.
FHA: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $11,000.
USDA, Conventional: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs, with a cap of $11,000.
VA: MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3% of the purchase price or appraised value to assist with down payment and/or closing costs.
Note that the $11,000 cap does not apply to school employees and fire department employees, or those purchasing new construction homes, manufactured homes, or homes with ADUs Review the sections below to find out more about the MyHome program.
PROGRAM ELIGIBILITY
Am I eligible to apply for this program? Review the guidelines below for both “Borrower” and “Property” Requirements to determine if you may be eligible to apply for the MyHome Assistance Program.
BORROWER REQUIREMENTS
• Be a first-time homebuyer. See the definition of a first-time homebuyer. • Occupy the property as a primary residence; non-occupant co-borrowers are not allowed.
• CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.
MEET CALHFA INCOME LIMITS FOR THIS PROGRAM.
*In the case of conflicting guidelines, the lender must follow the more restrictive. • Property Requirements • Be a single-family, one-unit residence, including approved condominium/PUDs • Guesthouses, granny units, and in-law quarters may be eligible • Manufactured housing is permitted • Condominiums must meet the guidelines of the first mortgage • There is a five-acre maximum on the size of the property
*In the case of conflicting guidelines, the lender must follow the more restrictive.
INTEREST RATE
What is the interest rate? Interest rates will vary depending on your financial circumstances, lender fees, and other factors. Interest rates can also change daily. We recommend that you check with a CalHFAapproved loan officer to receive an accurate rate quote for this program.
CalHFA does not lend money directly to consumers. CalHFA works through and uses approved lenders to qualify consumers and to make all mortgage loans. The fees you pay could be different depending on the lender and the program. View sample Annual Percentage Rates (APRs) here.
HOMEBUYER EDUCATION REQUIREMENT
CalHFA firmly believes that homebuyer education and counseling is critical to the success and happiness of a homeowner, and requires homebuyer education and counseling for first-time homebuyers using a CalHFA program.
WHO HAS TO TAKE THIS HOMEBUYER EDUCATION AND COUNSELING COURSE?
Only one occupying first-time borrower on each loan transaction.
HOW DO I TAKE THIS EDUCATION AND COUNSELING COURSE?
• ONLINE: eHome’s eight-hour Homebuyer
Education and Counseling course is the only online course accepted by CalHFA. (fee: $99)
Other online courses like Frameworks are not acceptable because they do not provide a onehour, 1-on-1 counseling follow-up session. • IN-PERSON or VIRTUAL: Live Homebuyer
Education and Counseling in-person or virtually through NeighborWorks America or any HUD-
Approved Housing Counseling Agency (fee: varies by agency).
HOW TO APPLY
How do I apply for this loan program? Since CalHFA is not a direct lender, our mortgage products are offered through private loan officers who have been approved & trained by our Agency. These loan officers can help you find out more about CalHFA’s programs and guide you through the home buying process.
Visit the Find a Loan Officer tab, to contact a loan officer in your area.
WHAT DOCUMENTS SHOULD I HAVE READY WHEN CONTACTING A LOAN OFFICER?
When initially contacting a loan officer, you may want to have this list of documents and information available to help answer questions that they will ask you:
• Pay stubs • Bank statements • Employment history • Previous tax returns
Sources; https://www.calhfa.ca.gov/homebuyer/programs/myhome.htm https://www.fha.com/grants/california-gsfa-platinum https://www.fha.com/grants/california-myhome-assistance-program
