What Is the CalHFA Loan Program — and How Does It Help California Homebuyers?
CalHFA is California’s state housing finance agency, and its conventional loan program is one of the most powerful tools available for first-time buyers who need help with the down payment. Here is how it works and who it is designed for.
What is CalHFA?
The California Housing Finance Agency (CalHFA) is a state agency whose mission is to create and finance affordable housing in California. CalHFA offers a conventional first mortgage — built on the Fannie Mae HFA Preferred platform — paired with optional down payment assistance through its MyHome Assistance Program. The combination allows eligible buyers to purchase a home with very little out of pocket.
The CalHFA conventional first mortgage
The underlying loan is a 30-year fixed-rate mortgage, fully amortizing, with a maximum LTV of 97% on conforming loan amounts and 95% on high-balance. Rates are set by CalHFA and vary based on the type of subordinate financing used. The program is available for purchase transactions only — not refinances — and limited to owner-occupied primary residences in California.
MyHome Down Payment Assistance
The MyHome program provides a deferred second loan equal to 3% of the appraised value or sales price, whichever is less. The money can be used for the down payment and/or closing costs — but not to pay off existing debt. The second loan accrues 1% simple interest annually, but no monthly payment is required. It becomes due at the earliest of: transfer of title, sale of the property, payoff or refinance of the first loan, or formal filing of a Notice of Default.
Who qualifies?
- First-time homebuyer requirement: Required when using CalHFA subordinate financing. A first-time homebuyer has not had an ownership interest in a primary residence in the past three years.
- Credit score: Minimum 660 for borrowers with income at or below 80% AMI; minimum 680 for borrowers above 80% AMI.
- Income limits: Income cannot exceed CalHFA’s published county-level income limits.
- Homebuyer education: Required for at least one occupying first-time homebuyer when subordinate financing is used.
A worked example (illustrative example, not a quote)
You buy a $500,000 home. The first mortgage is 97%, or $485,000. A MyHome second equal to 3% is $15,000, the lesser of the price and appraised value times 3%. If you sell after 7 years, simple interest at 1% is $15,000 × 1% × 7 = $1,050, so the second is paid off at $16,050 from your proceeds. No monthly payment was due in between. Actual terms depend on the program rules in effect when you apply.
Document checklist
- Pay stubs, W-2s, and tax returns for each borrower, since income is checked against the county limits
- Bank statements for the down payment, closing costs, and any reserves
- Photo ID and Social Security numbers
- Proof of homebuyer education completion, where required
- Purchase contract, to open the file once you are in escrow
Steps that keep the timeline on track
- Check your income against the county limit and confirm your score meets the minimum for your income tier.
- Complete the education course early. A missed certificate can hold up the file.
- Time your lock to the compliance review. CalHFA must issue its commitment before closing, so a short escrow leaves little room for delay.
- Respond to conditions quickly. Each round of conditions adds days.
Who it fits and who it may not
CalHFA suits first-time buyers within the income limits who want help with the down payment and who can plan around the extra review step. It is a weaker fit if you need a very short escrow, are over the income limit, or want to use the home as anything other than your primary residence.
Frequently asked questions
Can I pay off the MyHome loan early?
The second becomes due when you pay off or refinance the first, among other triggers. Ask about voluntary early payoff terms in the note.
What if I earn more than the county limit?
You would not qualify for the CalHFA subordinate financing, but a standard conventional loan or a different assistance program may still fit.
Will my rate be the same as on a standard conventional loan?
Not necessarily. CalHFA sets its own rates, and they vary with the type of assistance used. We compare your options when we review your scenario.
Related guides
- Community Seconds loans
- Layering assistance with a conventional loan
- Grants and forgivable loans in California
- Saving for a down payment and closing costs
Key takeaways
- CalHFA offers a 30-year fixed conventional first mortgage paired with down payment assistance.
- MyHome DPA provides up to 3% of the purchase price as a deferred second loan.
- No monthly payment on the second loan — it is due when you sell, refinance, or transfer title.
- Requires first-time homebuyer status when using subordinate financing.
- Minimum credit score: 660–680 depending on income relative to AMI.
- California only; purchase transactions only; primary residence only.
- On a $500,000 purchase, a 3% MyHome second is up to $15,000, and 1% simple interest over 7 years adds $1,050.
- Plan extra time for the CalHFA compliance review before closing.
- Income limits are county-specific, so check yours early.
Ready to explore your conventional loan options? Lendia can walk you through what you qualify for and find the right program for your goals.