0.5% Down Payment, Really?
If you thought the era of low down payment loan programs was over, think again! Home buyers have had access to FHA financing with a minimum 3.5% down in San Mateo County, but now home buyers have another low down payment loan option. This program is called the FHA California Homebuyers Fund Access loan program.
What is the CHF Access Low Down Payment Loan Program?
The California Homebuyers Fund and is sponsored by the California Rural Home Mortgage Finance Authority or the CRHMFA for short. The Homebuyers Fund, which ties in with the FHA Financing Program, was set up to serve Santa Clara and San Mateo County home buyers who can afford a monthly mortgage payment but do not have enough funds for a substantial down payment or closing costs.
How Does this Low Down Payment Loan Program Work?
The FHA CHF Access program allows a borrower to purchase a San Mateo County home with a down payment as little as 0.5% of the purchase price. You will receive an FHA first mortgage for 96.5% of the purchase price and a second mortgage through the California Homebuyers Fund program for 3% of the purchase price. This leaves you to come up with the remaining 0.5% of the purchase price, which can be paid through gift funds from family members. (Before accepting any gift funds, read my previous post How to Accept Gift Funds from Family.)
What Might a Purchase Look Like?
| Purchase Price | $500,000 |
| First Loan | $482,500 |
| Second Loan | $15,000 |
| Down Payment | $2,500 |
First Mortgage: $482,500; FHA 30 year fixed at 5.5% (based on today’s interest rate)
| Principal and Interest payment | $2,739.58 |
| Monthly Property Taxes | $520.83 |
| Homeowner’s Insurance | $65 |
| Monthly Mortgage Insurance | $221.15 |
| Total Monthly Payment of First Mortgage | $3,546.56 |
Details on 2nd Mortgage: $15,000; CHF Access 15 year fixed at 8.25%
| Principal and Interest Payment | $145.52 |
| Total Monthly Mortgage Payment | $3,692.08 |
This 0.5% minimum down payment can be paid through gift funds from a family member and like all FHA loans, the seller can pay up to 6% of the purchase price to cover closing costs. With the California Homebuyers Fund Access Low Down Payment Loan Program you can realistically purchase a home with little or no funds of your own.
Are There Any Restrictions for this Low Down Payment Loan Program?
Yes, there are income restrictions. You have to fall into the low-to-moderate income limits for each county.
What are the Income Limits for San Francisco, Santa Clara and San Mateo County?
| County | Income Limit |
|---|---|
| San Mateo | $116,160 |
| San Francisco | $116,160 |
| Santa Clara | $123,000 |
Looking to Purchase in Another California County?
We loan all up and down California. If you’re looking for the limits for another county, just email us at info[@]SanMateoMortgageBlog.com and we’ll send it over to you.
Do You Qualify for this Low Down Payment Loan Program?
To find out if you qualify for this low down payment loan program, or want more information give me a call at (650) 520-0915 or send me an email at info[@]SanMateoMortgageBlog.com to set up a free, no obligation phone or in person consultation.
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- How does the CalSTRS 80/17 Home Loan Program Differ from Conventional Financing?
- Two Down Payment Assistance Loan Programs for Home Buyers
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