The CalHFA Conventional program is a first mortgage loan insured through private mortgage insurance on the conventional market. The interest rate on the CalHFA Conventional is fixed throughout the 30-year term.
The CalHFA VA program is a VA-insured loan featuring a CalHFA fixed interest rate first mortgage. This loan is a 30-year fixed interest rate first mortgage. The CalHFA USDA Program is a USDA Guaranteed first mortgage loan program, which can be combined with the MyHome Assistance Program (MyHome).
A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture loan programs). Conventional loans can be conforming or non-conforming.
A conventional loan is a mortgage loan that follows the lending rules set by Federal Home Loan Mortgage Corporation (Freddie Mac) and Federal National Mortgage Association (Fannie Mae) and is not backed by any government agency. Conventional loans that follow Fannie Mae and Freddie Mac guidelines are called conforming.
CalHFA Government Loans (FHA): MyHome offers a deferred-payment junior loan of an amount up to the lesser of 3.5% of the purchase price or appraised value to assist with down payment and/or closing costs.
One of the most important benefits of using a CalHFA loan for a homebuyer is the access it provides to down payment assistance programs, and the most important providers of down payment assistance programs are localities and non-profits.
General Information. Do I have to pay back my Subordinate Liens? Yes; you signed both a Note and Deed of Trust. CalHFA subordinate financing is secured by a recorded lien on the property.
A conventional loan is often better if you have good or excellent credit because your mortgage rate and PMI costs will go down. But an FHA loan can be perfect if your credit score is in the high-500s or low-600s. For lower-credit borrowers, FHA is often the cheaper option.
The minimum down payment for a conventional loan in California is usually set at 3%. That's because Fannie and Freddie will acquire mortgage products with a loan-to-value (LTV) ratio up to 97% — but usually no higher than that.
The primary difference between conventional loans and FHA loans is that conventional loans are not government-insured. FHA loans are guaranteed with government funds that provide extra protection for lenders. This makes FHA loans easier to qualify for since the risk to lenders is lower.
Non-conventional mortgages are designed to help individuals with low to moderate incomes or individuals that require a low or no down payment. This type of loan caters to borrowers who may have been rejected for a conventional loan.
An FHA loan has less-restrictive qualifications compared to a conventional loan, which is not backed by a government agency. You need to have a higher credit score, lower debt-to-income (DTI) ratio and higher down payment to qualify for a conventional loan.
A nonconforming mortgage is a home loan that does not adhere to government-sponsored enterprises (GSE) guidelines and, therefore, cannot be resold to agencies such as Fannie Mae or Freddie Mac. These loans often carry higher interest rates than conforming mortgages.
What are the minimum credit score requirements for CalHFA conventional loan programs? The minimum credit score is 660 for borrowers with income less than or equal to HomeReady 80% AMI LI income limit.
CalHFA is a completely self-supporting state agency, and its bonds are repaid by revenues generated through mortgage loans, not taxpayer dollars.
Homebuyer education and counseling is not required for non- first-time homebuyer(s). To qualify for a CalHFA Government loan program, all borrowers, including co-borrowers must reside in the home and meet the definition of a first-time homebuyer.
Even though a conventional loan is the most common mortgage, it is surprisingly difficult to get. Borrowers need to have a minimum credit score of about 640 in order to qualify—the highest minimum score of all mortgage products—and have a debt-to-income ratio of 43% or less.
Conventional Loan Requirements
It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.
The mortgage approval process can take anywhere from 30 days to several months, depending on the status of the market and your personal circumstances.
Sellers' Own Perceptions
Sellers often prefer conventional buyers because of their own financial views. Because a conventional loan typically requires higher credit and more money down, sellers often deem these reasons as a lower risk to default and traits of a trustworthy buyer.
Yes. To convert an FHA loan to a conventional loan you'll need to meet the conventional loan lending criteria and complete a mortgage refinance. You'll also need to provide documentation so the lender can verify your finances.
FHA loans tend to have higher closing costs than conventional loans, but because FHA loans allow the seller to pay for more of your closing costs than conventional loans, they may actually be cheaper.
If the borrower(s) occupy the home for five (5) years, the full amount of the Forgivable Loan is forgiven. Any Forgivable Loans paid off prior to the five-year term will be forgiven on an annual pro- rated basis.
Payments can be made by sending a check or money order to the California Housing Finance Agency, Loan Administration, 500 Capitol Mall, Ste. 1400 (MS350), Sacramento, CA 95814. Make sure your name, property address, and loan number are on the payment instrument so that we can apply it to the correct loan(s).
A CalHFA first mortgage generally has a turnaround time at CalHFA of 1-2 business days for compliance review. CalHFA loans have straightforward paperwork, quick processing and dedicated customer service. Many of CalHFA's preferred loan officers have closed CalHFA loans within 30 days. 5.