CalHFA VA
CalHFA VA Loan Program: Affordable Homeownership Options for Veterans and Service Members
The CalHFA VA Loan Program is a specialized option within CalHFA Loan Programs created to support eligible veterans, active-duty service members, and surviving spouses on their path to homeownership in California. By pairing the benefits of a VA-guaranteed loan—such as no down payment and no monthly mortgage insurance—with CalHFA’s competitive interest rates and possible down payment or closing cost assistance, this program makes buying a home more accessible and affordable for those who have served. CalHFA VA loans are designed to honor service while providing long-term financial stability through flexible qualification guidelines and manageable monthly payments.
For California’s veterans and active-duty military personnel, the path to homeownership is often paved with the benefits of the U.S. Department of Veterans Affairs (VA) loan program. The VA loan is widely regarded as one of the most powerful mortgage products on the market, offering 100% financing and favorable terms. However, the California Housing Finance Agency (CalHFA) takes this benefit a step further. By combining the standard VA first mortgage with state-sponsored assistance, the CalHFA VA program offers a robust solution for borrowers who need help not just with the down payment, but—more critically for VA borrowers—with closing costs.
This report details the workings of the CalHFA VA program from the borrower’s perspective, outlining eligibility, financial requirements, property standards, and how it pairs with assistance to minimize out-of-pocket expenses.
1. Program Overview: How CalHFA VA Works
The CalHFA VA program is a first mortgage loan insured by the VA. Its primary feature is that it allows for a 100% Loan-to-Value (LTV) ratio, meaning you can finance the entire purchase price of the home without a down payment.
However, purchasing a home involves more than just the sale price; there are closing costs, prepaid taxes, and insurance. While standard VA loans allow for zero down, they do not automatically cover these closing costs. This is where CalHFA adds value. The CalHFA VA first mortgage serves as the foundation, which can then be paired with the MyHome Assistance Program to provide a subordinate loan that helps cover closing costs and prepaid items, effectively allowing you to enter the home with little to no cash out of pocket.
2. Borrower Eligibility Requirements
To qualify for the CalHFA VA program, you must meet criteria established by both the VA and CalHFA.
Citizenship and Service Status You must be a citizen or other National of the United States, or a “Qualified Alien”. Naturally, because this is a VA-guaranteed loan, you must meet the military service requirements to obtain a Certificate of Eligibility (COE) from the VA.
First-Time Homebuyer Requirement There is a nuanced rule regarding first-time homebuyer (FTHB) status for this program:
- With Assistance: If you plan to pair the VA loan with the MyHome Assistance Program (which is the most common scenario to cover closing costs), you must be a first-time homebuyer. CalHFA defines a first-time homebuyer as someone who has not held an ownership interest in a principal residence during the three years immediately preceding the purchase.
- Without Assistance: If you only use the CalHFA VA first mortgage without any subordinate financing (meaning you pay your own closing costs), the first-time homebuyer requirement is waived.
Owner Occupancy This program is exclusively for primary residences. You must intend to occupy the property as your primary home within 60 days of closing. - No Non-Occupant Co-Borrowers: You cannot have a non-occupant co-borrower (such as a parent who will not live with you) on the loan.
- No Non-Occupant Co-Signers: Co-signers who do not live in the property are also prohibited.
3. Financial Requirements: Credit, Income, and DTI
CalHFA imposes strict financial guidelines to ensure the sustainability of the loan.
Minimum Credit Score The minimum credit score for the CalHFA VA program is 640.
- Method: Lenders will use the middle score of the lowest-scoring borrower on the loan application.
- Automated Approval: Unlike CalHFA’s FHA program, the VA program does not allow manual underwriting. You must receive an “Approve/Eligible” or “Accept” recommendation from the Automated Underwriting System (Desktop Underwriter or Loan Product Advisor). If your credit history requires manual underwriting, you are not eligible for this specific program.
Debt-to-Income (DTI) Ratio Your DTI ratio—the percentage of your gross monthly income that goes toward debt payments—is capped based on your credit score: - Credit Score ? 700: The maximum DTI allowed is 50.00%.
- Credit Score 640 – 699: The maximum DTI allowed is 45.00%.
- Note: These caps apply even if the automated system approves a higher ratio.
Income Limits To qualify, your income cannot exceed the CalHFA Income Limits for the county where the property is located. - Credit Qualifying Income: CalHFA uses the income calculated by your lender for “credit qualifying” purposes. This means if you have a spouse who is not on the loan, or if you have overtime/bonus income that the lender is not using to approve the mortgage, that income generally does not count toward the limit.
- 2025 County Examples:
? San Diego County: $258,000.
? Los Angeles County: $211,000.
? Sacramento County: $239,000.
? Alameda/Contra Costa: $316,000.
4. Property Eligibility
The CalHFA VA program is available statewide across California, but the property itself must meet specific standards.
Eligible Property Types
- Single-Family Residences (SFR): Standard one-unit homes are eligible.
- Condominiums and PUDs: Condos and Planned Unit Developments are eligible if they meet FHA/VA project requirements.
- Accessory Dwelling Units (ADUs): Properties with “granny flats” or guest houses are eligible, provided the property is defined as a one-unit property and meets zoning ordinances.
Ineligible Property Types - Manufactured Homes: A critical distinction between the CalHFA VA program and other government loans (like FHA or USDA) is that manufactured homes are not permitted.
- 2-4 Unit Properties: You cannot purchase duplexes, triplexes, or fourplexes with this program.
Home Warranty For first-time homebuyers, a one-year home warranty is mandatory. This policy must cover the water heater, air conditioning, heating, and oven/stove/range. This requirement protects new buyers from immediate repair costs after closing.
5. Down Payment and Closing Cost Assistance
The most significant advantage of the CalHFA VA program is the ability to layer it with the MyHome Assistance Program. Since VA loans already offer 100% financing (zero down) on the first mortgage, the assistance funds are typically utilized to pay for closing costs, which can otherwise amount to thousands of dollars.
MyHome Assistance Program for VA Loans
- Loan Amount: You can borrow up to 3.0% of the sales price or appraised value (whichever is less).
? Note: This differs from the FHA version of MyHome, which offers 3.5%. - Interest Rate: The MyHome loan carries a 1.00% simple interest rate.
- Deferred Payments: You do not make monthly payments on the MyHome loan. Payments are deferred for the life of the first mortgage.
- Repayment: The principal and accrued interest are due when you sell the home, refinance, transfer the title, or pay off the first mortgage in full.
Ineligible Assistance Programs It is important to know what you cannot use with CalHFA VA: - Zero Interest Program (ZIP): The ZIP loan (0% interest for closing costs) is not available for the VA program. It is exclusive to the “CalPLUS” FHA and Conventional loans.
- MyAccess: This assistance is also restricted to the CalPLUS Access program and cannot be paired with VA.
Non-CalHFA Subordinates You are permitted to layer non-CalHFA assistance (such as a city or county grant) with the CalHFA VA loan, provided the CalHFA loan remains in the appropriate lien position and the combined Loan-to-Combined-Loan-Value (CLTV) does not exceed 105%.
6. Fees and Costs
CalHFA regulates the fees lenders can charge to ensure the program remains affordable.
- Lender Fees: Customary lender origination fees are capped at the greater of 3% of the loan amount or $3,000.
- Processing Fees: Lenders typically charge a nominal processing fee (max $250) for the MyHome subordinate loan.
- Master Servicer Fees: There is a 250fundingfee??andan??85 tax service fee payable to the master servicer (Lakeview Loan Servicing).
- High Balance Fees: If your loan amount exceeds the standard conforming loan limit (entering “High Balance” territory), an additional fee may apply, though the VA program does allow for high-cost loan limits.
7. Education Requirements
If you are a first-time homebuyer utilizing this program, education is mandatory to ensure you understand the financial commitment.
- Who must take it: At least one occupying first-time homebuyer must complete the course.
- Format: The course can be taken online (via eHome) or in-person/virtually through NeighborWorks America or a HUD-approved Housing Counseling Agency.
- Validity: The completion certificate is valid for one year.
Conclusion
The CalHFA VA Loan Program is a powerful financial tool that maximizes the inherent benefits of the federal VA loan. By permitting 100% financing on the first mortgage and offering a deferred-payment subordinate loan for closing costs (via MyHome), CalHFA allows eligible veterans and active-duty personnel to purchase a home with minimal upfront cash. While strict requirements regarding credit scores (640+), automated underwriting approval, and property type (no manufactured homes) apply, the program remains one of the most effective ways for those who have served to achieve the dream of homeownership in California.
FAQ's
Generally, yes, but there is an exception. If you are using the MyHome Assistance Program—which most borrowers do to help with closing costs—you and all other borrowers must be First-Time Homebuyers. This means you haven’t owned a principal residence in the last three years. However, if you obtain the CalHFA VA first mortgage without any subordinate financing (no MyHome loan), the first-time homebuyer requirement is waived. This makes the standalone CalHFA VA loan a viable option for repeat buyers who simply want the program’s competitive interest rates.
The CalHFA VA program allows for a maximum Loan-to-Value (LTV) ratio of 100% on the first mortgage. This means you can finance the entire purchase price of the home without a down payment, consistent with standard VA loan benefits. When combined with subordinate financing like the MyHome Assistance Program for closing costs, the Combined Loan-to-Value (CLTV) ratio is capped at 105%. This high CLTV allowance is designed to minimize the borrower’s out-of-pocket expenses, making homeownership more accessible for qualifying veterans.
No, the Zero Interest Program (ZIP) is not available for CalHFA VA loans. The ZIP assistance, which offers a 0% interest loan for closing costs, is exclusively paired with the “CalPLUS” loan products (CalPLUS Conventional and CalPLUS FHA). Since there is no “CalPLUS VA” option, you cannot utilize ZIP. However, VA borrowers can still receive help with closing costs by using the MyHome Assistance Program, which provides up to 3% of the sales price or appraised value as a low-interest deferred loan.
The maximum loan amount for the CalHFA VA program is determined by the FHFA High-Cost Loan Limits and the VA county loan limits. While the VA itself may guarantee larger loans if you have full entitlement, CalHFA adheres to these specific caps. If your base loan amount exceeds the standard conforming loan limits (entering “High Balance” territory), you will be subject to an additional fee that is net funded at the time of purchase. It is crucial to check the specific limit for your county, as these figures vary across California.
No, manual underwriting is not permitted for the CalHFA VA program. All loan files must be submitted through an Automated Underwriting System (AUS). Specifically, the loan must receive an “Approve/Eligible” recommendation from Fannie Mae’s Desktop Underwriter (DU) or an “Accept” recommendation from Freddie Mac’s Loan Product Advisor (LPA). If your loan application is referred for manual underwriting due to credit issues or insufficient credit history, you will not be eligible for this specific CalHFA product, unlike the CalHFA FHA program which allows manual underwriting in certain cases.
No, you cannot purchase a manufactured home using the CalHFA VA loan program. While CalHFA permits manufactured housing under its FHA, USDA, and Conventional loan options, they are explicitly prohibited under the CalHFA VA program guidelines. Eligible property types for CalHFA VA include single-family one-unit residences and approved condominiums or Planned Unit Developments (PUDs). If you are looking to purchase a manufactured home, you would need to explore the CalHFA FHA or Conventional loan products, which have specific credit score and DTI requirements for those property types.
Yes, strict income limits apply. The total qualifying income of all borrowers cannot exceed the CalHFA Income Limits established for the county where the property is located. For example, in 2025, the limit for San Diego County is $258,000, while the limit for Sacramento County is $239,000. Lenders are required to calculate your income using VA guidelines to ensure you qualify for the loan, and CalHFA uses this “credit qualifying” income to verify you do not exceed the program caps. Income from non-borrowing household members is generally not included.
The minimum credit score required for the CalHFA VA program is 640 for all borrowers on the loan. This applies to both the first mortgage and any subordinate financing. It is important to note that CalHFA uses the middle credit score of the lowest-scoring borrower to determine eligibility. If your credit score is between 640 and 699, your debt-to-income (DTI) ratio is capped at 45.00%. If your credit score is 700 or higher, you may qualify with a higher DTI ratio of up to 50.00%.
Yes, you can combine the CalHFA VA first mortgage with the MyHome Assistance Program. For VA loans, the MyHome program provides a deferred-payment junior loan of up to 3.00% of the sales price or appraised value, whichever is less. Since VA loans allow for 100% financing on the first mortgage, these MyHome funds are frequently utilized to pay for closing costs and prepaid items rather than a down payment. The MyHome loan must be recorded in the second lien position and carries a simple interest rate of 1.00% with deferred payments.
The CalHFA VA program is a first mortgage loan insured by the U.S. Department of Veterans Affairs. It is designed to assist eligible veterans and active-duty service members in purchasing a home with favorable terms, including a fixed interest rate. The program allows for 100% financing on the first mortgage, meaning no down payment is required. To qualify, borrowers must meet the specific military service requirements established by the VA and obtain a Certificate of Eligibility (COE). This loan can be combined with CalHFA’s down payment assistance to cover closing costs.
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