Key differences between Government loan programs

Not all programs allow this. You can purchase a manufactured home using the CalHFA FHA or CalHFA USDA programs, provided the home is a double-wide or larger, on a permanent foundation, and you meet higher credit standards (minimum 660 credit score). However, manufactured homes are strictly prohibited under the CalHFA VA program. Additionally, while FHA allows for leasehold estates in some cases, USDA does not allow leasehold estates for manufactured homes. If you are a veteran wishing to buy a manufactured home, you would likely need to utilize the FHA program rather than the VA program.

Yes. The Zero Interest Program (ZIP), which provides a deferred 0% interest loan for closing costs, is only available with the CalPLUS FHA program. You cannot use ZIP with the standard CalHFA FHA, CalHFA VA, or CalHFA USDA loans. If you choose VA or USDA and need closing cost help, you would typically use the MyHome Assistance loan. Since VA and USDA allow 100% financing on the first mortgage, the MyHome funds (3% of value) are free to be applied toward closing costs, whereas on an FHA loan, MyHome is almost entirely consumed by the down payment.

All three government programs (FHA, VA, and USDA) share the same baseline minimum credit score of 640. However, the FHA program is the most flexible regarding the method of approval at that score. While VA and USDA require an automated approval at 640, FHA allows for manual underwriting if you have a 660 score. Essentially, if you have a 640 score, you must get an automated approval regardless of the program. If you are buying a manufactured home, the minimum score jumps to 660 for both FHA and USDA. Borrowers with no credit score are not eligible for any of these programs.

The standard DTI limits are generally consistent across CalHFA government programs, but the underwriting method changes the hard caps. For FHA, VA, and USDA, the maximum DTI is 50% for borrowers with credit scores of 700 or higher, and 45% for those with scores between 640 and 699. The key difference arises with FHA manual underwriting, which strictly caps the DTI at 43%. Additionally, if you are purchasing a manufactured home under FHA or USDA, the DTI is capped at 45% regardless of your credit score. VA loans do not have a manufactured home DTI cap because they don’t allow manufactured homes.

CalPLUS Access FHA is unique because it replaces the Zero Interest Program (ZIP) with the MyAccess loan. While ZIP (found in CalPLUS FHA) is restricted to closing costs only, the MyAccess loan (2.5% of the loan amount) allows for funds to be used for either the down payment or closing costs. This offers more flexibility than the standard CalPLUS FHA. However, unlike ZIP which has 0% interest, MyAccess carries a 1.00% simple interest rate. This program is ideal for borrowers who need flexible funds that aren’t capped at just closing costs but need more than the standard MyHome offer.

The difference lies in the closing cost assistance and the interest rate. The CalHFA FHA is a standard loan that can be paired with MyHome for down payment help. The CalPLUS FHA is a specialized package that must be combined with the Zero Interest Program (ZIP). ZIP provides an extra loan of 2% or 3% of the loan amount specifically for closing costs at a 0% interest rate. Because CalPLUS FHA provides this extra layer of closing cost funding, the interest rate on the first mortgage is typically higher than the standard CalHFA FHA rate.

No, this is a distinct difference. CalHFA FHA loans (including CalPLUS FHA and CalPLUS Access) allow for manual underwriting if a borrower cannot obtain an automated approval, provided they meet stricter guidelines (minimum 660 credit score and maximum 43% Debt-to-Income ratio). In contrast, CalHFA VA and CalHFA USDA programs do not permit manual underwriting. For VA and USDA loans, you must successfully receive an “Approve/Eligible” or “Accept” recommendation from the Automated Underwriting System (AUS). If you require manual underwriting due to your credit history, the FHA program is your only CalHFA government option.

The CalHFA VA and CalHFA USDA programs differ significantly from FHA because they allow for a 100% Loan-to-Value (LTV) ratio on the first mortgage. This means eligible veterans (VA) or buyers in eligible rural areas (USDA) do not strictly require a down payment to secure the first loan. In contrast, the CalHFA FHA program has a maximum LTV of 96.5%, requiring a mandatory 3.5% down payment. However, FHA borrowers often use the MyHome Assistance loan to cover that 3.5% requirement, effectively creating a “zero out-of-pocket” down payment structure, even though the first mortgage itself requires one.

The amount of assistance you can receive through the MyHome Assistance Program depends on which government first mortgage you select. If you choose an FHA loan, MyHome provides a loan of up to 3.5% of the sales price or appraised value, exactly matching the FHA minimum down payment requirement. However, if you choose a VA or USDA loan, the MyHome assistance is capped at 3.0% of the sales price or appraised value. Since VA and USDA loans offer 100% financing on the first mortgage, this 3.0% is typically used to cover closing costs rather than a down payment.

The primary difference lies in the specific government agency insuring or guaranteeing the loan and the borrower eligibility for each. CalHFA FHA loans are insured by the Federal Housing Administration and are open to all qualified first-time homebuyers with a 3.5% down payment requirement. CalHFA VA loans are guaranteed by the Department of Veterans Affairs and are exclusively for eligible veterans and active-duty personnel, offering 100% financing. CalHFA USDA loans are for properties in designated rural areas and also offer 100% financing. While FHA requires a down payment, VA and USDA allow for zero-down purchases on the first mortgage.