The CalPLUS with ZIP (Zero Interest Program) home mortgage loan is a CalHFA down payment assistance program to help California home buyers even if they aren’t first time buyers.
The CalPLUS w/ ZIP mortgage program comes in two flavors.
Both assistance loan programs are 30 year fixed rate first mortgages combined with the ZIP 0% deferred interest silent second assistance loan.
CalPLUS assistance funds are not generated from pubic tax dollars, so they never run out of funds!
CalPLUS = 100% Financing
CalHFA’s Zero Interest Program (ZIP) provides assistance funds for both CalPLUS Conventional and CalPLUS FHA programs which makes 100% financing possible.
CalHFA borrowers have the option to choose how much ZIP assistance they want. Choosing to use the ZIP program, and the amount you choose, will result in paying a slightly higher interest rate (.125% to .25%) on the first mortgage.
- CalPLUS Conventional w/ ZIP
- ZIP 3% assistance = lower rate
- ZIP 4% assistance = higher rate
- CalPLUS FHA w/ ZIP
- ZIP 3.5% assistance = lower rate
- ZIP 4.5% assistance = higher rate
FYI ====> ZIP assistance funds can only be used to pay for your down payment, prepaid items, closing costs and principle reduction. Assistance funds cannot be used to pay off your debts or to pay the gap between an appraisal price and a sales price if the home should appraise for less than the sales price.
CalPLUS w/ ZIP (Zero Interest) Qualifying Guidelines
- DO NOT have to be a first time home buyer
- NO minimum borrower contribution
- 640 minimum credit score for both programs
- Owner Occupied – Primary Residence
- non-occupant co-borrowers NOT allowed
- Maximum 45% DTI ratio
- Cannot exceed the county Income limits
- Maximum 105% CLTV
- Cannot exceed the CalHFA county sales price limit
- Home buyer Education course and a Home Warranty is required for true first time home buyers (call me for details)
- CalPLUS is NOT subject to a recapture tax
Eligible Property Types
- SFR’s, PUD’s, and Condo’s. Condo’s are limited to 95% LTV when using the CalPLUS Conventional.
- Manufactured homes only allowed using CalPLUS FHA and requires a 660 minimum FICO score.
You can purchase foreclosures, bank REO’s, and short sales, as well as regular sale transactions.
CalPLUS Interest Rates
CalHFA sets the interest rate for both programs, so the interest rate is the same no matter which lender you work with. However, it is critical you work with a lender that specializes in qualifying, approving, and funding CalHFA down payment assistance programs.
CalPLUS interest rates also depend on how much ZIP assistance money is needed or wanted.
CalPLUS Mortgage Insurance
The CalPLUS Conventional mortgage program does have PMI mortgage insurance on it because you don’t have 20% down payment…..there is no way to avoid that.
The good news is that the private mortgage insurance premiums are discounted when using the CalPLUS Conventional program. This helps keep your payment lower.
CalPLUS w/ ZIP + MyHome Assistance = More Assistance
However, the MyHome Assistance program requires buyers be true first time homebuyers….meaning they cannot have owned a home in the previous 3 years and cannot show any deduction of mortgage interest paid on their tax returns for the last 3 years.
How To Apply for CalPLUS with ZIP + MyHome Assistance
Remember, CalHFA does not lend money directly to consumers, but rather purchases loans from private direct lenders (like us) that originates and underwrite loans that meet CalHFA’s specific loan guidelines.
BEWARE: most lenders are not experienced in working with assistance programs and most are NOT EVEN APPROVED to offer CalHFA home loans and may try steering you into other higher cost assistance programs to prevent you from working with a lender who can offer you this program.
If you want COMPLETE TRANSPARENCY about ALL OPTIONS, work with a licensed and approved mortgage lender who specializes in assistance programs. Home buyers should apply here to receive their loan pre-approval, contact me here, or just call (951) 215-6119 and I’ll guide you through the qualifying process.