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Tim C. Lorenz's Blog

By Tim C. Lorenz | Agent in Mission Viejo, CA

California Teachers Loan Program

The California Retirement Teachers Loan Program is very interesting only requiring a 3% down Payment, 17% Second and an 80% First, No Mortgage Insurance.

   This is a program that the Kevin Budde Team with Bank of America sent to us.  I thought it was important for the agents and public to know.

   To be eligible for the CalSTRS Home Loan Program, the borrower must be an employee of a California public school district, a California community college or a member or employee of the California State Teachers Retirement System.

  There are two programs, conforming and non-conforming. The maximum conforming program is an 80% first loan to $417,000, a second loan to $88,612 for a maximum combined loan amount of $505,612. The maximum purchase price is $521,250.

  The maximum non-conforming program is an 80% first loan to $536,082, a second loan to $113,918 for a maximum combined loan amount of $650,000. The maximum purchase price is $670,103.

  The borrowers cannot have credit scores below 620 for combined loan amounts up to $400,000 and 680 for combined loan amounts exceeding $400,000. The interest rate will be the same for both the first and the second mortgage, which is deferred.

  The second mortgage rate has a 30 year term with a 5 year deferred payment structure. No payments are required on the second the first 5 years. Beginning the sixth year, the accrued interest will be added to the loan balance. The loan will then be amortizing using compounded interest over the remaining 25 years, with the borrower making a monthly principal and interest payment. Since there are no payments on the second the first 5 years, the payment is not counted into the qualifying ratios of the borrower.

  There is no first-time home buyer requirement however, the borrower and their spouse may not own any other properties and they can only have one CalSTRS loan at any given time. The borrower must have 1% of their own funds and the remaining 2% may come from a gift from a relative.

  The program is for purchase transactions only, owner occupied and primary residences. The property must be located in California and is only allowed on single family residences and approved condominium projects. No units, manufactured homes or coops.

  Whatever the sales price is, the first must always be 80% loan to value and the second 17% loan to value not to exceed the maximum loan amounts above. Since the first is 80% there is no mortgage insurance. The borrower is required to impound taxes and insurance.

Tim Lorenz

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By Brad Yzermans,  Sun Mar 2 2014, 22:10
Now that CalSTRS is suspended, Mountain West just announced a new California Teacher Home Loan Program for CalSTRS members and school district employees that offers more favorable terms with discounted rates, reduces fees, and down payment options ranging from 3.5% to 5% with no PMI options.

Even better, Teachers do not have to be first time home buyers!

Teachers in California can learn more and check eligibility for the new CalPATH loan here ==> http://homeloanartist.com/2014/02/calpath-home-loan/

CalPATH can even be used to refinance an EXPLODING CalSTRS 80/17 loan. In the web reference link below, you can read more about how CalSTRS members and teachers are in for a HUGE surprise when their CalSTRS 80/17 loan adjusts upward $200-$600/month!!!

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