Process and Documentation

You cannot reserve a CalHFA loan until you have a fully executed sales contract signed by both the buyer and the seller. Once you are in contract, your lender enters your information into the CalHFA Mortgage Access System (MAS) to reserve the funds and lock in your interest rate. It is important to note that reservations are borrower- and property-specific. CalHFA does not allow substitutions; if you change properties or if the borrower changes, the original reservation must be cancelled, and a new one must be created subject to current rates.

Yes, CalHFA strictly regulates the fees lenders can charge borrowers. Customary lender origination fees are capped at the greater of 3% of the loan amount or $3,000. For subordinate down payment assistance loans, fees are even more restricted. Lenders may only charge a maximum processing fee of $50 for the Zero Interest Program (ZIP) and $250 for the MyAccess or MyHome loans. Additionally, borrowers will see specific CalHFA fees on their closing disclosure, including a $250 funding fee and an $85 tax service fee payable to the Master Servicer.

If you are applying for the ADU Grant (up to $40,000), the process requires distinct documentation because it is a grant, not a loan. Your lender must submit a package including the construction loan deed of trust, a construction loan approval, and an itemized budget for pre-development costs like architectural designs, permits, and soil tests. You must also sign a “CalHFA Applicant Affidavit” certifying that you will occupy the property and acknowledging that you will receive a Form 1099-G, as the grant funds are considered taxable income by the IRS.

The approval process involves two stages. First, your lender underwrites your file to ensure it meets standard investor guidelines (Fannie Mae/FHA) and obtains an automated underwriting approval (like Desktop Underwriter “Approve/Eligible”). Once the lender approves the loan, they upload the full compliance package to CalHFA. CalHFA reviews the file on a first-come, first-served basis to verify it meets state specific program rules. Borrowers should ask their lenders about current CalHFA turn times, as these can vary. Final loan documents cannot be signed until CalHFA issues a “Notice of Commitment”.

In addition to standard loan documents, the Dream For All program requires proof of “First-Generation Homebuyer” status. You must submit a signed affidavit certifying that you have not owned a home in seven years and that your parents do not currently own a home. During the voucher application process, you may need to provide your parents’ names, dates of birth, and current addresses to verify their homeownership status. Foster care alumni can qualify by providing foster care verification letters or court documents instead of parental information.

CalHFA requires a “Life of Loan” Flood Hazard Determination Certificate for all properties. Additionally, all first-time homebuyers purchasing a resale home must obtain a one-year home warranty protection policy. This policy must cover, at a minimum, the water heater(s), air conditioning, heating system, and oven/stove/range. Evidence of this warranty must be disclosed on the final Closing Disclosure or a copy of the warranty coverage must be provided to the lender. This requirement is waived only for new construction properties or non-first-time buyers.

Your lender is responsible for calculating your income to ensure it meets the CalHFA Income Limits for the county where the property is located. You must provide standard income documentation, such as pay stubs, W-2s, and tax returns, which the lender will use to calculate your “credit qualifying” income according to Fannie Mae or FHA guidelines. Income that is not used for credit qualifying is generally not counted toward the CalHFA program limits. However, if you are purchasing a home with an Accessory Dwelling Unit (ADU) and using rental income to qualify, that income will be included in the calculation.

Yes, homebuyer education is a strict requirement for eligibility. At least one occupying first-time homebuyer on the loan must complete an approved 8-hour homebuyer education course and provide a certificate of completion. This certificate is valid for one year from the date of issuance. The course can be taken online through eHome™ or virtually/in-person through NeighborWorks America or a HUD-approved agency. If you are applying for the Dream For All Shared Appreciation Loan, you must provide certificates for two courses: the standard education and a specific course regarding shared appreciation loans.

To qualify for most CalHFA programs, you generally must be a first-time homebuyer, defined as someone who has not held an ownership interest in a principal residence in the past three years. You will be required to sign a “CalHFA Borrower Affidavit and Certification” attesting to this status. If you currently own residential property (like a rental or vacation home), you must prove you do not live there. This typically requires submitting a Letter of Explanation (LOE) along with three years of cancelled rent checks or a Verification of Rent (VOR) for your current residence.

No, borrowers cannot apply directly to the California Housing Finance Agency. CalHFA does not lend money directly to consumers; instead, it purchases loans that are originated by approved private lenders. To begin the process, you must locate a CalHFA-approved lender, which can be a bank, credit union, or mortgage banker. This lender will be your primary point of contact for pre-qualification, document collection, and underwriting. If you are working with a mortgage broker, they must partner with a CalHFA-approved wholesale lender to process and submit your application for final approval.