CalSTRS offers an 80/17 combo loan program to help teachers purchase or refinance a home and are members of the California State Teachers Retirement System (CalSTRS).
CalSTRS is not an actual lender, rather they invest in mortgage notes which are then are paid back to the CalSTRS pension fund. The CalSTRS combo home loan is a very effective purchase loan program for teachers in the Inland Empire counties of Riverside, San Bernardino, San Diego, Orange County, and Los Angeles.
CalSTRS LOAN UPDATE: CalSTRS Loan Discontinued as of September 30, 2013. Loan program details below no longer effective. CalSTRS felt they could not offer more benefit than what other lenders can offer on the open market. Read the news release here.
CalSTRS Loan Alternative ==> As a result of CalSTRS decision to exit lending, a new program was launched to help Teachers save money and provide more affordable low down payment financing ==> CalHERO HomeLoan.
==> Read the complete list of homebuyer Assistance programs for Teachers and school district employees in California
To read more details why CalSTRS suspended/cancelled the CalSTRS home loan, read this blog Cal Pensions.com
Call Brad at Supreme Lending for more info (951) 215-6119 or contact me here.
What is a CalSTRS 80/17 Purchase Loan?
The CalSTRS 80/17 teacher purchase loan is a combo loan where a first loan (30 year fixed) is set at 80% LTV of the homes sales price (to avoid paying PMI) and a second mortgage is set at 17% CLTV.
This leaves the CalSTRS member/Teacher needing to come up with a 3% down payment, of which a minimum of 1% must come form the buyers own funds. The other 2% can be a gift from a family member.
The 17% second mortgage payment is deferred for up to 5 years, with interest being added back onto the principle balance. After 5 years, the principle and interest payment will begin and be amortized over 25 years.
- Any teacher or employee of a public school or community college
- Anyone eligible for CalSTRS pension benefits
- Do not have to be currently employed
Features/Benefits of a CalSTRS Home Loan
- One time free rate float down
- Do NOT have to be a First time home buyer
- No up front and no monthly paid PMI
- No income limitations
- Interest rate is ‘below market’ and set by CalSTRS – cannot buy the rate down
- Seller can concede up to 35 for closing costs
- Origination fee set by CalSTRS at 1.25%
- CalSTRS regulates/sets fees
- Generally more affordable than FHA financing for many reasons
CalSTRS Max Loan Amount
- Up to $417,000 conforming loan amount
- Up to $536,082 jumbo loan amount
CalSTRS Property Requirements
- Owner Occupied
- located in California
- Cannot own other properties
- Single family, condo/town homes and PUD’s are eligible
We are a direct lender committed to providing low down payment and other government assistance loan programs such as CalSTRS, CalPERS, CalHFA, down payment assistance programs from the city, county, and state levels, FHA, VA, USDA, and other community lending programs.
Contact Brad here or call direct (951) 215-6119 to compare loan options and secure your pre-approval.
Written by Brad Yzermans