CalHFA was created by the Zenovich–Moscone–Chacon Housing and Home Finance Act of 1975, which also permanently established and reorganized the California Department of Housing and Community Development. Known until 2002 as CHFA, CalHFA was rebranded "to keep pace with our expanding audience and the growing needs of the affordable housing marketplace" and "to elevate CalHFA’s profile on all key fronts." Historically, CalHFA has provided housing assistance in three areas: below-market interest rate mortgages and downpayment assistance for first-time homebuyers, most of whom were low- and moderate income families and ethnic minorities not well-served by market rate products, insurance for single-family home purchase mortgages, and loans for the development of multifamily rental housing. These financial products were funded through sale of revenue bonds secured by the mortgage products and the underlying property. The operating costs of the agency are paid by origination and service fees, and the difference between the interest paid on outstanding debt and the interest charged on the loans made. Beginning in 2002, passage of Proposition 46 provided funding for additional activities through sale of general obligation bonds. This source of funding was extended by passage of Proposition 1C. In 2014, the CalHFA board voted to expand first mortgage eligibility to non-first-time homebuyers.
Structure
The Single Family Division provides low interest rate home financing to low to moderate income homebuyers in California, as well as down payment and closing cost assistance. The Multifamily Programs division provides permanent financing for the acquisition, rehabilitation, and preservation or new construction of rental housing that includes affordable rents for low and moderate income families and individuals. The Asset Management Division is responsible for the management of agency-financed multifamily rental developments, where each project is monitored regarding its financial, physical and occupancy compliance with various regulations in California.
Programs
The CalPLUS loan programs feature a CalHFA fixed interest rate first mortgage, insured either through FHA or on the conventional market. This loan is fully amortized for a 30-year term and is combined with the CalHFA Zero Interest Program for down payment assistance. The Cal EEM + Grant combines an FHA Energy Efficient Mortgage with an additional 4% grant to help homebuyers improve their home with energy-efficient upgrades. The California Homebuyer’s Downpayment Assistance Program offers a deferred-payment subordinate loan amount of of the purchase price of appraised value, whichever is less, to be used for down payment and/or closing costs. The Extra Credit Teacher Home Purchase Program is intended for eligible teachers, administrators, classified employees and staff members working in high priority schools in California. Offers a deferred-payment junior loan of an amount not to exceed the greater of $7,500 or 3% of the sales price or in CalHFA-defined high cost areas an amount not to exceed the greater of $15,000 or 3% of the sales price. Assistance can be used for down payment. The Mortgage Credit CertificateTax Credit Program is a federal credit which can reduce potential federal income tax liability, creating additional net spendable income which borrowers may use toward their monthly mortgage payment. This MCC Tax Credit program may enable first-time homebuyers to convert a portion of their annual mortgage interest into a direct dollar for dollar tax credit on their U.S. individual income tax returns.
Operations
CalHFA is authorized to administer the activities of the California Housing Finance Fund, the California Housing Loan Insurance Fund, and two state general obligation bond funds. CalHFA has $6.8 billion in assets that are mainly loan receivables and investments related to bond proceeds. CalHFA is a statutorily independent agency and component unit of state government, and is not subject to Budget Act appropriation. Budget information for CalHFA is displayed within that of the Department of Housing and Community Development. Down Payment Assistance programs are all different with certain requirements for each. State or local housing authorities, a non-profit organization, or lender usually set the requirements and conditions for the DPA program. Some programs require you or your loan officer to take a short course on Down Payment Assistance for first time home buyers.
