The CalHFA MyHome down payment assistance loan is a "silent second" subordinate loan that can be used to cover the down payment and closing costs of a home. The MyHome loan can cover as much as 3.5% of the sales price of the home, and, when combined with a CalPLUS or CalHFA FHA loan up to 96.5%, can cover the entire purchase price of the property. Interest accrues on the MyHome loan, but interest and principal payments for the MyHome loan are deferred for the life of the loan. These programs are offered through participating lenders affiliated with the California Housing Finance Agency.

The CalPLUS loan includes a "silent third" zero interest program or "ZIP" loan which can be used to cover closing costs, such as title fees, and prepaid items, such as escrowed taxes and insurance. The amount of the ZIP loan is either 2% or 3% of the 1st loan amount including up-front mortgage insurance, depending on the program chosen when the loan is originated. No interest accrues on the "ZIP" loan for the life of the loan. Principal payments are also deferred for the "ZIP" loan for the life of the loan.

Borrowers may pay off either the MyHome or ZIP loans at any time prior to becoming due.

The MyHome loan is subject to a $10,000 loan amount cap. This cap is waived for manufactured homes, new construction, and single family residences with Accessory Dwelling Units. The $10,000 cap is also waived for employees of a school or fire department.

Requirements

  • Borrowers must be US citizens or qualified resident aliens
  • Borrowers must be first time home buyers, meaning that they have not had an ownership interest in a principal residence at any time in the last 3 years
  • At least 1 borrower must complete a Homebuyer Education course and provide a completion certificate
  • Borrowers must not exceed the income limits for the program, listed here: https://www.calhfa.ca.gov/homeownership/limits/#income
    • However, income from non-salary or base income sources such as overtime, bonus, or self-employment can be excluded for qualification purposes
  • The sales price of the property is limited to $795,000
  • Debt-to-income ratio is limited to 43% total. The silent second and third are not included in the ratios as their payments are deferred for the life of the loan
  • The minimum credit score for all borrowers is 660
  • Total loan-to-value of all loans can not exceed 105% of the purchase price
  • Eligible properties are Single Family Residences, FHA approved Condominiums, and Manufactured Homes
  • Properties must be occupied by the owner
  • A 1 year home warranty must be obtained by the borrower
  • Escrow holdbacks are not allowed

Summary

The MyHome program allows for borrowers lack the funds for a down payment to purchase a home throughout the state of California. Although the program has some restrictions on income, and a limit on the size of the silent second (effectively limiting the purchase price), many homebuyers will be able to find homes that qualify under this program. The manufactured home and Accessory Dwelling Unit exceptions to the cap will also make more homes eligible for this program.