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The types of home loans available in CA include standard national options such as:

Conventional,

FHA,

VA,

and

USDA loans,

along with CA-specific programs offered by the

California Housing Finance Agency (CalHFA)

and other local agencies.

Primary Loan Categories

most home loans in CA fall into these main categories, which determine qualification criteria and terms:

Conventional Loans:

can be used to buy or refinance a wide range of properties, including a primary residence, a second home, or an investment property;

flexible;

not backed by the government, distinguishing them from FHA or VA loans;

available as either:

conforming

(meeting standard loan limits set by Fannie Mae and Freddie Mac)

or

non-conforming / jumbo

(for loan amounts above conforming limits, common in high-cost CA areas);

generally require higher credit scores;

may need private mortgage insurance (PMI) if the down payment is less than 20%.

In CA, Private Mortgage Insurance (PMI) is required by lenders for conventional loans when the down payment is less than 20% of the home's purchase price;

the rules for PMI cancellation are primarily governed by federal law, the Homeowners Protection Act of 1998 (HPA),

though CA has supplementary laws regarding disclosure and cancellation based on current property value.

The primary difference between conforming & non-conforming mortgage loans is:

conforming loans adhere to specific guidelines set by the Federal Housing Finance Agency (FHFA),

allowing them to be purchased by government-sponsored enterprises (GSEs)

Fannie Mae and Freddie Mac;

in contrast,

non-conforming loans do not meet these guidelines and carry different terms and risk factors.

FHA Loans:

insured by the

Federal Housing Administration (FHA),

these loans are a popular option for first-time homebuyers due to their low down payment requirements (as low as 3.5%) and more flexible credit score guidelines

VA Loans:

guaranteed by the

U.S. Department of Veterans Affairs (VA),

these loans are available to eligible service members, veterans, and surviving spouses;

a major benefit is that they often require zero down payment and no mortgage insurance

USDA Loans:

backed by the

U.S. Department of Agriculture (USDA),

these loans are for low-to-moderate-income borrowers purchasing homes in designated rural or suburban areas. They also offer a zero down payment option

Jumbo Loans:

since CA home prices are often higher than national averages, jumbo loans are common;

these loans exceed the federal conforming loan limits (which can be over $1 million in some high-cost CA counties) and have stricter requirements

Loan Structure and Specialized Types

beyond the primary categories, loans can also be defined by their structure and purpose:

Fixed-Rate Mortgages:

the interest rate remains the same for the entire life of the loan (e.g., 15-year or 30-year terms),

providing predictable monthly payments

Adjustable-Rate Mortgages (ARMs):

these have a fixed interest rate for an initial period (e.g., 3, 5, 7, or 10 years)

after which the rate can adjust periodically based on market conditions

FHA 203(k) Renovation Loans:

these loans combine the cost of home purchase and needed renovations into a single mortgage

Reverse Mortgages:

available to homeowners 62 and older,

these allow conversion of home equity into cash payments without requiring monthly mortgage payments

Construction Loans:

short-term financing used to cover the costs of building a new home,

which typically converts to a permanent mortgage upon completion

California-Specific Programs (CalHFA)

The California Housing Finance Agency (CalHFA)

offers programs, often for first-time or low-to-moderate income homebuyers,

that can be layered with the main loan types:

CalHFA Conventional & FHA Programs:

30-year fixed-rate first mortgages

CalPLUS Programs:

these first mortgages have a slightly higher interest rate but are combined with down payment and closing cost assistance options

Down Payment Assistance (DPA) Programs:

MyHome Assistance Program:

a deferred-payment junior loan to help with down payment/closing costs;

The CA MyHome Assistance Program, offered by the California Housing Finance Agency (CalHFA), is an active program that provides down payment and/or closing cost assistance to eligible first-time homebuyers.

The assistance is structured as a deferred-payment second mortgage (or "silent second") with no monthly payments required.

Key Features

Assistance Amount:

the program offers a loan of up to 3% of the home's purchase price or appraised value for conventional, VA, or USDA first mortgages, or up to 3.5% for FHA first mortgages

Loan Type:

a junior loan (second mortgage) with a simple interest rate (typically 1%) that is deferred

Repayment:

the loan amount and any accrued interest do not require monthly payments but become due and payable when the home is sold, refinanced, the first mortgage is paid off, or the title is transferred

No Equity Sharing:

unlike some other programs (like the Dream For All), the MyHome program does not require the homeowner to share any of the home's appreciation with the state

Layering:

the MyHome loan can be combined with a CalHFA first mortgage and potentially other programs, such as the CalHFA Zero Interest Program (ZIP) for additional closing cost assistance.

Eligibility Requirements

To qualify for the

MyHome Assistance Program,

borrowers must meet the following criteria:

First-Time Homebuyer:

all borrowers must be first-time homebuyers, generally defined as not having owned and occupied a primary residence in the past three years

Owner-Occupied Property:

the home must be a single-family, one-unit residence (including approved condos, PUDs, or manufactured homes on a permanent foundation) that the borrower will occupy as their primary residence.

Income Limits:

borrowers must meet CalHFA's county-specific income limits, which are based on the area median income (AMI)

Credit Score:

minimum credit score requirements apply (e.g., 640 for FHA loans, 680 for conventional loans),

which vary depending on the specific first mortgage program

Homebuyer Education:

at least one occupying borrower must complete a mandatory homebuyer education and counseling course through an approved provider

CalHFA First Mortgage:

MyHome program

must be used in conjunction with a

CalHFA-approved first mortgage.

Application Process

CalHFA does not lend money directly to consumers.

To apply, you must work with a

CalHFA-approved private loan officer or lender

for help determining your eligibility,

selecting the appropriate CalHFA first mortgage and assistance programs,

and

guiding you through the application and homebuying process

Zero Interest Program (ZIP):

a deferred-payment second loan offering a set percentage (2% or 3%) of the mortgage amount at a 0% interest rate;

refers to a type of financing offer where a borrower pays no interest on the principal balance for a specified period or the entire term of the loan;

these programs are typically used by government housing agencies and universities to provide assistance for specific purposes, such as covering home closing costs or providing home loans for faculty members.

Dream For All Shared Appreciation Loan:

a DPA (Down Payment Assistance) program where the borrower shares a portion of the home's appreciation in exchange for assistance;

a state-funded program designed to help first-time, first-generation homebuyers

with their down payment and closing costs.

In exchange for the assistance, the homeowner agrees to repay the original loan amount plus a portion of the home's appreciation when they sell or transfer the property;

the total repayment is capped at 2.5 times the original loan amount.

The program was most recently available in a voucher-based round in April 2024, with updated income limits taking effect in June 2025.

Credit score:

FICO score of 680 or higher was required for the most recent round

Residency:

at least one borrower must be a current CA resident.

Homebuyer education:

required for all borrowers

The 2024 application round ran for a limited window in April and was highly competitive.

Applications were selected via a lottery and issued vouchers, with winners having a limited time to find a home and close the deal.

Funding for the program is limited and provided in distinct application periods rather than being continuously available.

Local cities and counties (e.g., Los Angeles, San Diego) may also offer their own specific assistance programs.

All information is deemed reliable but not guaranteed.

Buyers and sellers should conduct their own due diligence and consult with qualified professionals before making decisions.

©Will.iam Halfhill - "Will on the Hill"

"The gĀygent"

REALTOR® 02202075

©halfhillbilly@gmail.com

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925.421.5401

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