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Condos4Tenants: CHFA 100% loans
The CHFA, or "CHAFA" as it is sometimes known, is operated by the California Housing Finance Authority. It is designed to provide up to 100% of home loan financing to prospective eligible first-time homebuyers. It generallyconsists of a standard 97% FHA - CHFA fixed-rate 30-year mortgage and a 3% CHFA down payment assistance second mortgage, which is also called a "sleeping" or "silent" second. The second mortgage is offered for 30 years at 3% simple interest. All payments are deferred on this second mortgage until one of the following happens: the CHAFA first mortgage becomes due and payable; the first mortgage is paid in full or refinanced; or, the property is sold.
The CHFA 100% Home Loan Program is available to all low and moderate income homebuyers in all 58 counties in California. In order to qualify for a CHFA loan, certain eligibility requirements must be met. They are:
Have an annual household/family income that does not exceed income limits for the family size and county in which the home is located.
Property must be owner-occupied for the term of the loan or until sold.
Meet credit, income and loan requirements of the CHFA lender and the mortgage insurer.
Be a first-time homebuyer, which is defined as a person(s) who has not had an ownership interest in their
primary residence during the previous three years. This requirement is waived if property is located in a
Federally designated Target Area.
Have sufficient funds available to meet the required down payment - 3-5% plus closing costs. Some
restrictions apply to gift funds.
Have the legal right to permanently reside in the United States.
CHFA loans are subject to a Federal recapture tax. Recapture is a Federal income tax that borrowers may have to pay if they sell or transfer their CHFA-financed home within 9 years. A "Guide to Recapture Brochure" explaining Recapture in detail is available directly from CHFA . To obtain a the brochure call (916) 322-3991
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