CalHFA announced the new School Teacher and Employee Assistance Program (STEAP) to aid in the purchase of a home in California. Eligible homebuyers who qualify for down payment assistance must be first time homebuyers employed at any K-12 California public or charter school, school district offices, and county or continuation schools. STEAP is available to all employees including teachers, administrators, school district employees, and support staff Members.
The STEAP assistance loan is a deferred payment (0% interest) silent second mortgage up to 4% of the sales price that can be used to satisfy the minimum down payment and help pay buyer closing and settlement costs.
The School Teacher and Employee Assistance Program can only be used with a CalHFA Conventional, CalHFA FHA, or CalHFA VA first loan.
STEAP can be combined or layered with other down payment or closing cost assistance programs except the MyHome Down Payment Assistance program, but must accompany a CalHFA first loan.
For a complete list of homebuyer assistance programs for teachers, read this California Teacher Home Loan and Assistance Programs.
- Primary residence – owner occupied only
- Minimum FICO score: 640
- Debt-to-Income max: 45%
- Sales Price Limit: $660,000
- Maximum CLTV: 105%
- CalHFA approved homebuyer education course is required
- First time home buyers only (cannot have owned a home in the last 3 years)
- Income Limit: Cannot exceed the CalHFA county income limit here
- Do not have to live or buy in the school district of where you work
- Non-occupied co-signers only allowed when using a CalHFA Conventional first lien
- Be employed at a k-12 public or charter school, at a district office, or county/continuation school in California
Income is calculated pursuant to tax compliance guidelines and cannot exceed the county limits found here.
The School Teacher and Employee Assistance Program can be used with a CalHFA Conventional 1st loan to purchase an SFR or condo and CalHFA’s FHA loan to purchase a SFR, Condo, or Manufactured home.
Repayment of the Assistance Loan
Payment of the School Teacher and Employee Down Payment Assistance loan is deferred for the life of the first loan but must be repaid under these circumstances:
- Transfer of title (change of ownership)
- Sale of Property
- Payoff of the first loan
- * Refinance of the first loan
If refinancing your first loan, the STEAP loan can be subordinated to avoid having to pay it off if all subordination requirements are satisfied….contact me for those details and how that can be done.
Get the Facts & Know Your Options
Which assistance program is best for you? Which program provides the lowest rate and/or lowest payment? Which assistance program will help you qualify for the largest loan amount? Which down payment assistance program provides the most assistance or also pays for your closing costs? Are there assistance programs for Teachers or employees at private schools? Will using a down payment assistance program actually be more costly than using the CalHERO Teacher & Employee program?
You have to realize that 95% of all lenders and loan officers have no clue what assistance programs are available to you and/or unable to offer them to you. Most loan officers simply don’t have the resources, experience, or knowledge to answer these questions.