Has anyone ever used CHFA (California Housing finance Agency)

Asked by Aaron, Los Angeles, CA Fri Aug 1, 2008

for down payment assistance? Whats the process like? How long does it take?

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Julie, Home Buyer, Orange County, VT
Thu Aug 14, 2008
We are currently using CALHFA and we were originally suppose to close on July 16 then we ask for an extension to July 31 to give us 45 days. CALFHA overlooked our funds and delayed our process. We had to ask for a second extension and CALFHA is stilll not done looking at our paperwork. We have submit everything possible and now we are heading to our 3rd extension. There is absolutely nothing we can do to make the process faster. So if you are going to use CALFHA make sure your loan officer submits every paper that they could possibly ask for so then don't put your paperwork in hold as well. We will be closing at 2 1/2 months.
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Forefront Re…, Agent, Rancho Cucamonga, CA
Sat Aug 9, 2008
Good Morning Aaron,
I would probably offer you an opposing opinion of CalHFA. I own both a real estate company and a mortgage brokerage. So seeing how CalHFA plays through from beginning to end, I would be more than leery. There are several pit falls. For one, CalHFA is an entirely separate source than your lender, which means an entirely different set of eyes and time frames needed to underwrite it. Also, you are now dealing with a gov't. bureaucracy directly If you have good lung capacity, that's a plus because you may find a lot of breathe holding in the process. Given all of that, you now have two factors that play out. One is in your interest rate lock. When you lock your loan rate, it is for a definitive time period. And you may find CHFA will bog down your process to the point of putting that time frame in jeopardy (not to scare you, just be aware of it).
The other factor is in the concept of "free money". In this market, "free" is a funny thing. A lot of sellers, particularly when dealing in repos, do not want buyers that have no money into a purchase. They are aware of the potential for that transaction falling out as well as those same time frames for CHFA.
If you have any other questions, please don’t hesitate to call or visit our website shown below.

Pat Palmer-Broker/Realtor
Forefront Real Estate
Forefront Mortgage

154 W. Foothill Blvd #A308
Upland, CA 91786

Phone: 909.286.1301
eFax: 909.912.8002
Web Reference:  http://www.ffhomes.net
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Bill B, , northern california
Fri Aug 1, 2008
Hi Aaron,
We are an approved mortgage broker with CalHFA and have closed many loans that incorporates either a CalHFA 1st loan or a specific lender's 1st loan program (i.e. FHA) and a CalHFA 2nd.

The agent that answered your question is correct in that you must be a FTHB (first time home buyer), meaning you haven't owned a property in the last 3 years and must meet income guidelines. There are some programs that also use DTI (debt-to-income) ratios to qualify.

The 2nd loan programs are deferred or silent meaning you pay them back when: 1) you sell the home; 2) if you refinance the home; or 3) change title. Otherwise no payment is required. Some programs are deferred AND if you own the property for a certain period become forgiven and the interest rate on the loan drops.

There are loan limits as well.

Before you get married to the CalHFA program, make sure the lender you use provides a comparison between the different types of loans available for your specific situation. Learn which type of loans works best with your financial situation and purchase strategy.

If you want to talk more about this and other loan programs give me a call at 916/871-2250.

Good luck with your purchase!
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Shel-lee Dav…, Agent, Rolling Hills Estates, CA
Fri Aug 1, 2008

As a First Time Homebuyer Specialist I will share what I know of the CalHFA program:
1. Not all lenders are knowledgeable in this loan. Make sure you work with someone who is. (I would be happy to make a couple of referrals for you in the LA area.)
2. CalHFA is the last of the 100% financing options available in this market. Of course, they know that and so their interest rate is at least 0.5% higher than most other loans, sometimes more.
3. The way that you get the 100% financing is through a small 2nd. I know there have been some recent changes in the program and I have not updated myself on them, however, I believe the 2nd has not payment for the first few years.
4. There is also a sister program that will pay most, if not all, of your closing costs.
5. There is an equity participation figure, which phases out over 10 years.
6. You need to write an offer with a 60 day window to accomodate the processing. Some of the better lenders can get it done in 45 days. The complication is that the apps have to be tiered, in other words the CalHFA program has to accept you before you can even apply for the down payment and closing cost assistance.
7. I almost forgot to mention two very important items: a. you must be a first time homebuyer and b. there are income limitations for qualification (in other words you cannot make over $XXX, which depends on family size and area of purchase).

I believe this covers all your questions, plus. Again, the best thing is to build a team of professionals who will walk you through the process. This relieves you of the stress and allows you to enjoy the home buying process. Let me know if I can be of contribution in any way and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
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Keith Sorem, Agent, Glendale, CA
Fri Aug 1, 2008
Just a heads up. Due to the FHA loan limits not many people in Los Angeles have used FHA loans due to the home values in LA. Due to the decline in home values and the increase in the loan limits, you will see more people taking advantage of FHA loans.

So do not be discouraged if you see few responses. I'll be interested to see how many people respond too.
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