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.