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CalHFA Loan Eligibility: Are You Eligible for this Excellent Program?

CalHFA is an important government organization for aspiring California homeowners. They provide support for first-time buyers and people with low to moderate incomes, helping to increase the rate of homeownership all across the state, which is considered an important measurement for overall economic stability and prosperity.

CalHFA provides support for a variety of loans, although they do not actually loan money. By providing this support, lenders are more likely to issue loans and borrower are more likely to see mortgage approval. Their programs include first-mortgage options, loan support for veterans living in the state, and additional support for conventional loans. 

But to use CalHFA loans, you need to meet a few requirements. While there are specific details to these requirements, most borrowers will be eligible. With a moderate income and decent credit history, you will likely meet CalHFA loan eligibility.

Do You Meet CalHFA Loan Eligibility?

Important Notes About These Loans

It’s important that borrowers understand one important aspect of these loans: CalHFA does not accept applications directly. Instead, they work through Preferred Loan Officers and approved lenders. This means that you won’t contact the CalHFA office for mortgage approval, but will instead work with one of their approved lenders.

All the programs offered by CalHFA have different requirements for income limits, credit scores, citizenship status, and other factors, so you need to talk with a lender or lending agent to understand the specifics of various options. CalHFA offers descriptions for all their loan programs, but it helps to talk with a knowledgeable professional.

CalHFA Loan Eligibility: What are the Borrower Requirements?

While the requirements and eligibility status of these loans can change, there are some general requirements that apply to most or all of these loans.

  • Credit: First of all, you will need to meet the credit requirements for the specific loan on which you are applying. These credit limits can vary, but the current requirements are between 660 and 680 for a minimum score.
  • Income Limits: While you need to be able to afford the mortgage payments, you also need an income that justifies government assistance. Therefore, if your income is too high, you will be ineligible. The income limits for CalHFA loans are set below the federal limits, but most borrowers will be eligible. In San Diego County, for example, the most-recent income limits at the time of this article were $170,000; in nearby Riverside and Imperial counties, the limits are below $140,000. So not only do they change, there are different limits for different areas; just know that they are not so low that they become restrictive to most buyers. (Loan limits subject to change.)
  • Primary Residence Only: To use a CalHFA loan, you will need to personally occupy the property in question. This means that you cannot use the loan to purchase a second home, vacation home, or investment property.
  • Homebuyer Education: Being an informed buyer is important, so CalHFA (along with many other government-supported programs) requires completion of homebuyer education courses and a certificate of completion.
  • First-Time Buyers Only: If you are renting a property, you are likely eligible for these loans. But if you currently own your home, you will be ineligible for CalHFA loans, as it is intended for first-time buyers only. There is, however, some flexibility to the term “first-time homebuyer.” (See below.)

Note: Eligibility for CalHFA loans can change and will vary by lender and lending agent. This article is for general information ONLY does not reflect an official statement of eligibility. Contact our staff for current and accurate eligibility.

Homebuyer Education: An Important Yet Easy Part of CalHFA Eligibility

Homebuyer learning online
To use a CalHFA loan, you will need to complete homebuyer education.

Homebuyer education is one of the main requirements for all CalHFA loans, so it helps to fully understand this component. There is a lot involved in buying and owning a home, especially when the purchase includes a mortgage loan. To reduce the frequency of default, and to create knowledgeable buyers (a knowledgeable buyer is a strong buyer), many government-supported loan programs require homebuyer education.

Homebuyer education and counseling can improve the chances of success with a home purchase, but the benefits are realized long after you buy a home. Only one occupying first-time buyer listed on the loan transaction has to complete homebuyer education; so if you are an eligible married couple, only one spouse has to complete the education program. However, it seems reasonable to say that couples would most benefit if both complete the education.

This requirement can be completed online or in person. Currently, CalHFA only accepts eHome’s eight-hour program, which can be completed for a fee of $99. This program offers a one-hour counseling session that comes in a person-to-person format, which is not offered by many other programs.

If taking the courses in person, face-to-face Homebuyer Education and Counseling through and HUD-approved counseling agency is allowed, but fees will vary.

Once complete, you will be issued a certificate of completion that can be presented to lenders.

“First-Time Homebuyer” Does Not Literally Mean First-Time Homebuyer

One of the requirements for CalHFA loans is that borrowers must qualify as “first-time homebuyers.” But this requirement is not exactly literal, as you could have owned a home in the past and still be eligible for the program.

To be considered a “first-time buyer” under the CalHFA rules, you cannot have owned a home in the past three years. So if you owned a home, but sold it, say, fives years ago and have been renting ever since, you are considered a first-time buyer.

Of course, if you have never owned a home, you are eligible and can take advantage of all the benefits provided by a CalHFA loan. 

Learn More About CalHFA Loan Eligibility Today

You deserve an affordable loan that helps you purchase a top-quality house. Contact our experienced staff today to learn more about CalHFA loans and see if they are the right option for your purchase.