INTEREST
RATE |
Fixed interest rate for the entire loan term. See the current published rates.
|
TERM |
Interest-only payments for the first five years, followed by a 30-year fully amortized loan for a total of 35-year term
|
LTV |
Maximum LTV: 100%
|
CLTV |
Maximum CLTV: 107%
|
ORIGINATION FEES |
1.5% origination fee
No discount points allowed
|
PROPERTY ELIGIBILITY |
Property must meet all of the following requirements:
- Sales price of the home cannot exceed CalHFA’s sales price limits established for the county in which the borrower is purchasing.
- Be a single-family, one-unit residence, including approved condominium/PUD (See Program Bulletin #2005-18 for Condominium requirements)
- Manufactured housing is not permitted on the CalHFA interest only PLUS loan program.
- Meet the requirements of CalHFA.
|
MORTGAGE INSURANCE
|
Mortgage Insurance is provided by CalHFA Mortgage Insurance Services and is required on the first loan in excess of 80.00% as follows:
| All Non-Conforming IOP Loans and Conforming IOP Loans Reserved through July 31, 2007 |
|
LTV:
|
Coverage
|
Premium:
|
| 97.01 - 100% |
35%
|
.85%
|
| 95.01 - 97% |
35%
|
.85%
|
| 90.01 - 95% |
35%
|
.75%
|
| 85.01 - 90% |
35%
|
.55%
|
| 80.01 - 85% |
35%
|
.40%
|
| Conforming loans reserved on or after August 1, 2007 |
|
LTV:
|
Coverage
|
Premium:
|
| 97.01 - 100% |
20%
|
.59%
|
| 95.01 - 97% |
18%
|
.50%
|
| 90.01 - 95% |
16%
|
.46%
|
| 85.01 - 90% |
12%
|
.34%
|
| 80.01 - 85% |
6%
|
.23%
|
|
BORROWER ELIGIBILITY |
Borrowers must meet the following requirements:
- Be a U.S. citizen, permanent resident alien or qualified alien
- Be a first-time homebuyer, unless home is located in a federally designated Targeted Area
- Occupy the property as their primary residence; non-occupant co-borrowers are not allowed
- Borrower’s income cannot exceed CalHFA’s income limits established for the county in which the borrower is purchasing
- Meet credit, income and loan requirements of CalHFA
|
TRANSACTION TYPE |
Purchase transactions only
|
PARTICIPATING LENDERS |
All CalHFA-approved Lenders also must be approved to participate in Conforming interest only PLUS by CalHFA’s designated master servicer. Refer to our Lender List by Product to find an interest only PLUS participating lender.
|
MAXIMUM LOAN AMOUNT |
Financing is available up to 100% of the lesser of the appraised value or the sales price limits established for the county in which the property is located
- Conforming interest only PLUS loan limit cannot exceed current Fannie Mae conforming loan limits.
- Non-Conforming loans are those that exceed the current Fannie Mae loan limits
|
SUBORDINATE FINANCING |
All CalHFA subordinate loan programs except CalHFA Housing Assistance Program (CHAP) are eligible to be used with this loan program. These include:
*Only eligible for one program per transaction.
** For Conforming IOP only AHPP Programs approved as “CalHFA MBS Program Eligible” by CalHFA and the CalHFA designated master servicer will be permitted.
|
UNDERWRITING GUIDELINES |
See CalHFA’s Underwriting Guidelines.
interest only PLUS loans are qualified by using PITI assuming a 35-year amortization and not utilizing the interest only monthly payment. Loans must be underwritten either by Desktop Underwriter (DU) MyCommunityMortgage Approved/Eligible (Non-Conforming loans may receive an Approve/Ineligible for the loan amount only), or manually underwritten within CalHFA Conventional Loan Underwriting Guidelines.
|
INTEREST ONLY PERIOD |
During the interest only period (first five years), the required monthly payment will consist of interest, taxes and hazard insurance. Flood and mortgage insurance and home owners association dues may also be included if required.
|
PREPAYMENTS |
No prepayment penalty.
If principal prepayments are made during the interest-only period, the required monthly payment will adjust downward to reflect the principal reduction.
Additional principal payments made after the interest-only period will be applied to decrease the outstanding principal balance.
|
PAYMENT INCREASE NOTICES |
Servicers must give Borrowers a reminder notice each year that their payments will increase beginning in year six, as well as a final payment increase reminder 45 days prior to the actual adjustment. |
|
DOCUMENTATION
|
FILE TRANSMITTAL |
Only one package is necessary for CalHFA conventional loan files. Refer to the Loan Submission Checklist for documentation needed.
Send all package loan files and documents to:
CalHFA Homeownership Division
1121 L Street, 7th Floor
Sacramento, CA 95814
|
HOW TO APPLY |
Call Robert A. McMahon at (619) 857-1657
|
NOTES AND DEEDS |
Non-conforming loans may use either the CalHFA conventional documents or Fannie Mae/Freddie Mac uniform documents until September 1, 2007. At that time use of the Fannie Mae/Freddie Mac documents are mandatory.
Conforming loans must immediate use the Fannie Mae/Freddie Mac documents, including but not limited to:
- Fannie Mae/Freddie Mac, Form 3271 (1/01)
- Multistate Interest-Only Period Fixed Rate Note, Form 3005 (1/01)
- California – Single Family – Fannie Mae/Freddie Mac Uniform Instrument (Deed of Trust)
- CalHFA Financing Rider to the Note and Deed of Trust
Lenders must use applicable documents (e.g., MERS, PUD Rider, etc.).
|
