CalHFA

CalHFA (California Housing Finance Agency) makes it easier for Californians to buy homes with its affordable homeownership programs. It offers affordable housing options to those who qualify through initiatives like home loans, grants, down payment assistance, and other financial support. While CalHFA mainly focuses on helping first-time homebuyers, it also has other programs to help meet different housing-related needs.

Benefits of CalHFA Programs

Affordability

CalHFA programs are designed to make homeownership and rental housing more affordable for Californians, particularly those with low to moderate incomes. These programs offer a variety of low-interest loans, down payment assistance, and grants, which can really help reduce the financial burden of buying or renovating a home.

While many of the programs have specific requirements to qualify, it’s common to find loan options with flexible terms that are generally more favorable than traditional mortgages. Learn about home renovation loans with the best rates available!

By lowering upfront costs and keeping monthly payments manageable, CalHFA programs help more Californians achieve homeownership, make major home renovations, or find affordable rental housing.

Community Impact

CalHFA’s impact goes beyond just helping individuals; it has a broader positive effect on entire communities. When more people can afford homes, neighborhoods become more stable, local economies get a boost, and everyone benefits from a stronger, more connected community.

As more residents are able to afford homes, local businesses thrive, property values stabilize, and overall community well-being improves. Plus, the jobs created through home construction and renovation projects are a big win for local economies.

By making housing more accessible, CalHFA helps create more vibrant communities throughout California.

Types of Programs Offered

Homebuyer Assistance Programs

CalHFA has several programs to help first-time homebuyers make their dream of owning a home a reality. These programs include:

• Down Payment Assistance Programs: The MyHome Assistance Program gives you a loan of up to 3.5% of the purchase price or appraised value to help with your down payment. This is a lifesaver, especially if you find it tough to save enough money upfront.
• Mortgage Credit Certificates (MCC): This program lets you turn part of your mortgage interest into a tax credit. In other words, you can lower your federal income taxes! Learn more about home improvements with tax advantages.
• Closing Cost Assistance: The Zero Interest Program (ZIP) helps cover your closing costs with a second loan that has zero interest. You don’t have to pay it back until your first mortgage is paid off or refinanced, so it really takes the pressure off when you’re buying a home.

Home Renovation Programs

Apart from programs that focus on assisting homebuyers, CalHFA also offers several programs focused on home renovations. These include:

• Energy Efficient Mortgage (EEM) Programs: With these programs, you can finance energy-efficient upgrades as part of your mortgage. This means you can save on utility bills while increasing your home’s value.
• ADU Grant Program: If you’re looking to build an accessory dwelling unit (ADU) on your property, this program gives you up to $40,000 for the pre-development costs. This relieves some of the financial burden that comes with adding more space to your property. Learn more about ADUs.
• Partnerships with Non-Profits: CalHFA partners with organizations like Rebuilding Together, GRID Alternatives, and Habitat for Humanity. These partnerships offer home repair services, solar panel installations, and affordable loans or grants for home repairs. This makes it easier for homeowners to keep their properties in tip-top shape. 

Refinancing Options

If you’re already a homeowner and want to make your mortgage payments easier to handle, you may qualify for some CalHFA refinancing programs, such as:

• Mortgage Refinancing Programs: These programs can help you refinance your existing mortgage, which might lower your monthly payments and make homeownership more manageable. Discover what low refinancing rates mean for your renovation.
• Access to Home Equity for Renovations: If you’re looking to tap into your home equity for renovations, there are options available to help you fund those improvements and boost your home’s value. Learn more about home equity for renovations.

Rental Assistance Programs

In addition to homebuyers and those looking to renovate, CalHFA also looks out for renters, especially those with low incomes. The agency does this through various rental assistance programs, such as:

• Rental Subsidies: These programs help eligible low-income individuals afford their monthly rent. This way, every Californian has a place to call home.
• Support for Affordable Rental Housing: CalHFA partners with developers to create and maintain affordable rental options, like the Section 811 Project Rental Assistance Program. This helps to keep housing accessible in California.

CalHFA Home Loan Programs

CalHFA has various mortgage programs that can help you buy or renovate your home, especially if you’re a first-time buyer. Here’s a rundown of the key programs you might find helpful.

CalHFA MyHome Assistance Program

The MyHome Assistance Program is a great option if you need a little extra help with your down payment or closing costs. It offers a junior loan of up to 3% of the purchase price or appraised value, which you don’t have to pay back until you sell or refinance your home.

To qualify, you’ll need to be a first-time homebuyer, live in the home as your primary residence, and complete a homebuyer education course. 

Explore our educational resources to learn more about home loans.

CalHFA Energy Efficient Mortgage

If you’re looking to make your home more energy-efficient, you might want to consider the Energy Efficient Mortgage (EEM) program. This lets you finance energy-saving home improvements as part of your mortgage so you can save on utility bills in the long run.

To qualify, your property needs to meet certain energy efficiency standards, and the improvements should be cost-effective.  

CalHFA VA Loans

For veterans and active-duty service members, CalHFA offers VA loans that come with some great benefits, such as no down payment and no private mortgage insurance (PMI). To take advantage of this program, you’ll need to meet the VA’s eligibility requirements and follow CalHFA’s guidelines. 

CalHFA Conventional Mortgage

If you prefer a conventional loan, the CalHFA Conventional Mortgage is a good choice, particularly for low and moderate-income first-time homebuyers. This program offers competitive interest rates with down payments starting as low as 3%. Keep in mind that you’ll need to meet certain income limits and credit score requirements to qualify.

CalPLUS Conventional Mortgage With ZIP

If you need help with closing costs, the CalPLUS Conventional Mortgage with Zero Interest Program (ZIP) might be a suitable loan option. This program combines a conventional loan with a second loan that covers your closing costs. The best part is that the ZIP loan is deferred and has no interest, making it easier to manage any upfront expenses. 

CalHFA FHA Mortgage

The CalHFA FHA Mortgage program offers an FHA-insured loan, which usually requires a lower down payment and has more flexible credit requirements. This program is ideal if you don’t have a ton saved up for a down payment and want to make homeownership more attainable.

CalPLUS FHA Mortgage With ZIP

If you’re looking to make the most of your budget, the CalPLUS FHA Mortgage with ZIP might be a good financing option. Similar to the CalPLUS Conventional option, this mortgage combines an FHA loan with a second deferred loan for closing costs. This means you can finance your home while getting some help with upfront expenses. Learn more about second mortgages for home improvement.

RenoFi Loans

CalHFA programs are a great option for many first-time homebuyers looking to make homeownership more affordable. But if you’re already a homeowner planning to expand your space—such as adding an ADU or doing a major renovation—financing can get tricky. Traditional home equity loans often fall short because they’re based on your current home value, which may not leave you with enough equity to fund your project.

That’s where RenoFi loans come in. They use the After Renovation Value of your home, meaning you can borrow based on what your home will be worth after the improvements are made. For example, if your home is currently valued at $500,000 with a $400,000 mortgage balance, and you expect it to rise to $640,000 after renovations, a RenoFi loan would let you borrow up to $176,000, thanks to the future value of your home.

So, if you’re considering a home renovation, RenoFi is by far the smartest way to finance your project. Learn more and explore your borrowing options here.

Who Can Apply for CalHFA Home Loans?

CalHFA programs have some specific eligibility criteria to make sure those who need help the most get it. You need to meet the following requirements to qualify:

• Citizenship: You must be a US citizen, a permanent resident, or a qualified alien.
• Income Requirements: You must meet specific income limits based on where you live in California. These limits can vary, so it’s worth checking what applies to your area.
• Credit Score: You’ll need a minimum credit score of 660. It’s a good idea to check your score before applying.
• Debt-to-Income (DTI) Ratio: Your DTI ratio should be below 45%. This basically means your monthly debt payments shouldn’t take up too much of your income. Learn how to calculate your DTI ratio.
• First-Time Homebuyer: You need to be a first-time homebuyer, which means you haven’t owned a home in the last three years.
• Homebuyer Counseling: You’ll need to attend a homebuyer counseling course and provide a certificate of completion. This helps make sure you’re ready for the responsibilities of homeownership.

What Properties Qualify for CalHFA Programs?

If you’re considering buying or renovating a home with CalHFA homebuyer assistance or loans, it’s important to know what types of properties qualify. Your property needs to check all these boxes to qualify:

• Location: The property must be in California. Homes outside the state are not eligible for CalHFA programs.
• Primary Residence: The home must be your primary residence. This means it’s where you’ll be living most of the time, not an investment property or vacation home.
• Property Type: The property should be a single-family home, but some condos and manufactured homes might also be considered. Check with CalHFA to see if your specific property type qualifies.
• No Land Trusts or Leaseholds: Unfortunately, properties held in land trusts or leaseholds aren’t eligible for CalHFA programs. You’ll need to own the property outright.

Get Funds for Your Housing-Related Needs Today

Many CalHFA programs help with upfront and closing costs to make buying a home easier. They also offer support for home renovations. However, these programs don’t cover the entire cost of buying a home or doing major renovations.

The good news is that with a RenoFi loan, you can get all the funding you need right away. RenoFi offers a lot of borrowing power with highly competitive rates. And it’s usually easy to qualify, even if you don’t have a ton of equity!

Additionally, our RenoFi loans are the smartest way to finance a home renovation project. Unlike traditional loans, which are based on your current home value or require you to refinance your primary mortgage and give up your low rate, RenoFi loans are based on the after-renovation value of your home. This allows you to borrow, on average, 11x more, get a low monthly payment, and keep your low rate on your first mortgage. Contact us today to find a home loan that best suits your needs.