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.
- CalPLUS Conventional – up to 97% LTV
- CalPLUS FHA – up to 96.5% LTV,
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.
Eligible 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 on the first mortgage.
- CalPLUS w/ ZIP
- ZIP 2% assistance = lower rate
- ZIP 3% 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 FHA
- 680 minimum credit score for Conventional
- Owner Occupied – Primary Residence
- Maximum DTI ratio
- 45% = credit scores under 700 (and manufactured homes)
- 50% = credit scores over 700
- Cannot exceed the county Income limits
- Maximum 105% CLTV
- No sales price limit
- Loan limits here
- Homebuyer 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
- Manufactured homes ARE allowed with a minimum 660 credit score
You can purchase foreclosures, bank REO’s, and short sales, as well as regular sale transactions.
CalPLUS Interest Rates
CalHFA determines and 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, processing and funding CalHFA down payment assistance programs.
The CalPLUS interest rates depend on three variables:
- Whether you choose the 2% ZIP or 3% ZIP assistance option
- Reduced rate when a borrowers income is below the Area Median Income (AMI), which is specific to a certain geographic area
- Reduced interest rate if the geographic area has no income limit due to it being in a low income designated census tract
You can search the Area Median Incomes on the Fannie Mae HomeReady Eligibility income look up map on this page here
CalPLUS Mortgage Insurance
The CalPLUS Conventional mortgage program does have monthly paid PMI mortgage insurance because you don’t have 20% down payment…..there is no way to avoid that, and FHA always requires monthly mortgage insurance.
The good news is that the private mortgage insurance premiums are discounted when using the CalPLUS Conventional program, which helps keep your payment lower.
Receive Closing Costs Assistance Too!
The CalHFA MyHome Assistance program that provides down payment and closing cost assistance that can be used with the CalPLUS FHA or CalPLUS Conventional assistance program.
The School Teacher and Employee Assistance Program can be used with the CalPLUS assistance program as well.
The MCC program can be combined with the CalPLUS assistance program as well.
The MyHome Assistance program, STEAP and the MCC tax credit programs require 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 lenders that originate 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.
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