CalHFA’s On Demand Training: Conventional First Mortgage Products

[MUSIC PLAYING] Hello and welcome to CalHFA's on-demand lender training series My name is Molly Ellis

Our focus in this video is our conventional first mortgage program's basic guidelines and the common ways to layer closing cost and down payment assistance programs to benefit your borrower First, let's talk about our CalHFA Conventional Program This is a conventional first mortgage with our lowest possible interest rate It has a maximum loan-to-value of 97% and a maximum combined loan-to-value of 105% with a minimum credit score of 640 And it follows Fannie Mae's HomeReady guidelines

For loan amounts over $424,100, there is a 95% max LTV and a high balance fee Next, is our CalPLUS Conventional Program This first mortgage also follows Fannie Mae's HomeReady guidelines, but it comes with built-in closing cost assistance called Zero Interest Program or zip CalHFA offers ZIP with a loan amount at 3% of the first mortgage loan amount or ZIP with the loan amount at 4% of the first mortgage Please check out our rate page for pricing and the high balance fee

ZIP has a zero interest rate with deferred payments It's only available for first-time homebuyers Remember that the definition of a first-time homebuyer is someone who has not owned and occupied a principal residence in just the past three years One of the best benefits of using either conventional program is the reduced mortgage insurance rates through Genworth Mortgage Insurance The borrower can choose from single premium or monthly premium options

Here's a sample of the rates through Genworth You can always access Genworth's mortgage insurance rates through our website by clicking on the Lenders/Realtors section, choose the Loan Program Handbooks tab, then choose the program handbook applicable to your loan For all CalHFA conventional programs used by first-time home buyers, homebuyer education is required for at least one borrower on the loan CalHFA does not allow manual underwriting or nontraditional credit on our conventional loans What makes our program so great is our down payment assistance and closing cost assistance

Layer these programs with our first mortgages to increase affordability for your homebuyers For example, you can layer our MyHome Assistance program with either of the conventional first mortgages we've just talked about MyHome is 3 and 1/2% of the sales price or appraised value, whichever is less, which could get your borrower close to 7 and 1/2% in mortgage assistance when layered with CalPLUS and ZIP The interest rate is only 2 and 1/2% simple interest with deferred payments, and the borrower has to be a first-time home buyer MyHome has to be used with a CalHFA first mortgage and it must be in second lien position

The last program you can layer with a CalHFA first mortgage is the Mortgage Credit Certificate Tax Credit program or MCC Tax Credit program The MCC Tax Credit program is not a loan It's a 20% federal income tax credit This is a statewide program offered in areas where localities have limited funding If your county already has an MCC Tax Credit program, we encourage you to apply through that agency's local, county, or city program first

You can use the CalHFA MCC Tax Credit Program with or without a CalHFA first mortgage eHousingPlus is our administrator for this program, so they will handle the processing on behalf of CalHFA There is a $450 MCC fee paid to eHousingPlus when you use the MCC Tax Credit Program behind a CalHFA first mortgage There's a $750 MCC fee when you use the MCC Tax Credit Program without a CalHFA first mortgage You can use that program to income qualify your borrower per the investor's guidelines

There is a mandatory training that you'll need to take through eHousingPlus You can find the link to this training by clicking on the Lenders/Realtors section of the website, choose the Loan Program Handbooks tab, then scroll down to the MCC Tax Credit Program section Then choose Access MCC Training On your screen is the website and the phone number for eHousingPlus just in case you have questions regarding the CalHFA MCC Tax Credit Program That covers our conventional first mortgage programs and the down payment assistance and closing cost assistance that can be layered with them

Now, let's move on to the property requirements and maximum lender origination fees The property requirements for these programs, for the most part, follow Fannie Mae's HomeReady guidelines Also, make sure you adhere to any lender or investor overlays The sales price of the property must be within CalHFA's published sales price limits A one-year home warranty is required for first-time homebuyers unless they're purchasing new construction

The property cannot exceed five acres and manufactured homes are not allowed The property cannot have an income producing component unless it meets Fannie Mae guidelines for an accessory dwelling unit then as allowed you can count the rental income but don't forget to count it in like CalHFA income limit calculation too Now, let's talk about lender fees You must be a CalHFA approved lender The maximum CalHFA allows the lender to charge in lender fees on the first mortgage is 3%

This includes origination, processing, and underwriting It does not include any third-party fees Our rates are at par, so you have to charge origination on these loans but with the closing cost and down payment assistance from ZIP and MyHome, the borrower will still have very little out-of-pocket expenses CalHFA will allow you to charge an additional subordinate processing fee of $250 for MyHome and an additional $50 processing fee for ZIP Also, you may not charge any additional lender fees like an origination fee on the subordinate loans

We want to help make this easy, so we have provided some tools to help you process loans with CalHFA programs The loan program handbook for each one of our programs includes all the details about the program in one easy handbook The Conventional Loan Program Matrix provides a quick reference of terms and requirements for all CalHFA conventional programs The very popular Loan Scenario Calculator will help you calculate loan amounts and print results for your borrowers You can find these tools by clicking on the Lenders/Realtors section of the website, then click on the Loan Program Handbooks tab for the program handbooks and the Tools, Affidavit and Docs tab for the Conventional Loan Program Matrix and the Loan Scenario Calculator

Now, let's look at the fun stuff before we close Our single-family lender training team offers in-person training classes every month across the state Attend a four-hour workshop to learn all about CalHFA's programs Classes are announced each month on our website and through our monthly e-news announcements To sign up for a class, visit CalHFA's website, choose the Training Calendar link under Lenders/Realtors, and sign up for a class that will work best for you

We also provide customized marketing materials that can be downloaded from our website by clicking on the Lenders/Realtors section of the website, choose the Loan Officers link, then scroll down and choose the Sales, Tools, and Marketing Materials link For any questions you may have, contact Single Family Lending at 916-326-8033, or you can email our Lender Services Division at lendertraining@calhfacagov Thank you so much for your time

Now get out there and help more Californians have a place to call home

Source: Youtube

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