CalHFA announced new maximum sales price limits for new construction and resale homes throughout California in. in many counties throughout California, like Riverside County and San Bernardino County, there was a huge 25% drop in sales price limit.
Riverside County and San Bernardino County went from a max sales price limit of $461,539 down to $347,625! One of the largest sales price limit reduction in all of California.
2014 & 2015 CalHFA Sales Price Limits
Effective 9/9/2014 for all CalHFA assistance programs
|New Construction &|
Click ==> here to see sales price & income limits in all California counties.
Why Did CalHFA Reduce the Sales Price Limit?
Don’t worry, CalHFA is not single handily conspiring to kill the housing market recovery in California…..they are trying to help. The new CalHFA Sales price limit is a direct result of HUD reducing their maximum FHA loan limits….so it’s their fault.
Unfortunatley, CalHFA guidelines state the maximum sales price limit cannot exceed 90% of the average area purchase price limit for non-targeted areas or 110% in federally designated areas.
How will the CalHFA Sales Price Limit Impact Home Buyers?
This will make home buying more difficult for buyers who were planning to use a CalHFA assistance program in counties that experienced significant drops in the FHA loan limit.
I have two buyers who were pre-approved for Conventional financing, combined with the 3% CHDAP program, who can no longer buy a home over $347,625 in Riverside County.
A lower sales price limit means fewer buyers in the higher price range. Fewer buyers means sellers may have to reduce their price or give concessions to attract a qualified buyer….which means prices of homes may come down…..it’s a domino effect.
Expect More Homebuyers to Fall Out of Escrow at the 11th Hour
Between the many guideline changes from CalHFA, lower CalHFA income limits, FHA, Fannie Mae, USDA, VA, FHA loan limits being reduced, not to mention lenders who have more restritive overlays, buyers right now are falling out of escrow more often because the loan officers they choose to work with are WRONGLY pre-approving buyers.
Home buyers should probably consider working with an experienced industry expert who can demostate his knowledge of guidelines and criteria needed to qualify.
The day of the fast talking sales person who promises the world and tells you what you want to hear rather than what you need to know are slowly diminishing….buyer beware.
Alternatives to CalHFA Homebuyer Assistance Programs
CalHFA is not he only game in town, in fact, there are several down payment or closing costs assistance program you may be eligible for. Down payment assistance sources can come from from a city, county, state, or non-profit agency.
BORROWER BEWARE ==> most lenders are not approveed to offer even a fraction of the assistance programs that are available throughout the state. To keep from losing you a sa customer, they often tell buyers they are not eligible in hoopes you will give up your search for a program.
If you would like to explore home loan options and find out which assistance programs you may be eligible for, call me (951) 215-6119.