CalPLUS FHA

Generally, no. CalHFA has a strict policy regarding “subordination,” which is the process of allowing a second loan to stay in place while you refinance the first one. For the CalPLUS FHA program (including ZIP and MyHome loans), CalHFA generally does not allow subordination for a standard rate-and-term or cash-out refinance. This means if you want to refinance in the future to take advantage of lower interest rates, you must have enough equity or cash to pay off the first mortgage and the ZIP and MyHome loans in full at that time.

Payments on both the ZIP (closing cost assistance) and MyHome (down payment assistance) loans are deferred. This means you do not make monthly payments on them while you live in the home. However, the principal balance plus any accrued interest (1% simple interest for MyHome; 0% for ZIP) becomes due and payable in full when a “trigger event” occurs. These events include selling the property, refinancing your first mortgage, transferring the title to someone else, or paying off the first mortgage in full.

Yes, manufactured homes are eligible under the CalPLUS FHA program, but they must meet specific criteria. The home must be a double-wide or larger; single-wide homes are not permitted. The home must also be on a permanent foundation and cannot be on leasehold land. Financial requirements are tighter for these properties: you must have a minimum credit score of 660 and a maximum Debt-to-Income (DTI) ratio of 45.00%. Furthermore, you must receive an automated approval; manual underwriting is not permitted for manufactured housing transactions.

Yes, unlike CalHFA’s Conventional loan products, the CalPLUS FHA program allows for manual underwriting. This is beneficial for borrowers who may have credit events that prevent an automated approval from systems like Desktop Underwriter (DU). However, manual underwriting comes with stricter qualifying guidelines. If your loan is manually underwritten, your minimum credit score must be 660 (instead of 640), and your maximum Debt-to-Income (DTI) ratio is capped strictly at 43.00%. Additionally, you cannot use manual underwriting if you are purchasing a manufactured home.

Yes, all CalHFA programs have income caps to ensure they serve low-to-moderate income households. The total income of all borrowers cannot exceed the specific limit for the county where the property is located. For example, in 2025, the annual limit for Los Angeles County is $211,000, while Alameda County is $316,000. It is important to note that CalHFA generally uses the income calculated by your lender for “credit qualifying” purposes. This means that income not used to approve the loan (such as income from a non-borrowing spouse) may not count toward the program limit.

Yes. Because the CalPLUS FHA program relies on subordinate financing (the ZIP loan and typically MyHome), you must meet the definition of a first-time homebuyer. CalHFA defines this as any borrower who has not held an ownership interest in a principal residence during the three years immediately preceding the purchase of the new home. This requirement applies to all borrowers on the loan. Additionally, if you are married, your spouse must also meet this requirement, even if they are not going to be on the loan, unless you legally separate your interests.

To qualify for the CalPLUS FHA program, the standard minimum credit score is 640. However, strict requirements apply in certain scenarios. If your loan requires manual underwriting (meaning it did not receive an automated approval) or if you are purchasing a manufactured home, the minimum credit score increases to 660. Lenders determine eligibility based on the middle credit score of the lowest-scoring borrower on the application. Borrowers with no credit score are not eligible for this program, and non-traditional credit histories are generally not accepted.

Yes, you can and most borrowers do. While the CalPLUS FHA program includes ZIP for closing costs, it allows you to “stack” the MyHome Assistance Program to cover your down payment. For FHA loans, MyHome provides a subordinate loan of up to 3.5% of the sales price or appraised value. Since the minimum down payment for an FHA loan is 3.5%, this allows you to finance the entire down payment. By combining the First Mortgage, MyHome (for down payment), and ZIP (for closing costs), you can purchase a home with very little of your own money upfront.

The Zero Interest Program (ZIP) is a mandatory component of the CalPLUS FHA loan. It acts as a “silent second” or third mortgage that provides you with funds equal to 2.00% or 3.00% of your total first mortgage loan amount. As the name implies, the interest rate on this assistance is 0.00%. Crucially, ZIP funds are restricted to paying for closing costs and prepaid items (like insurance and taxes); they generally cannot be used to satisfy the down payment requirement. You do not make monthly payments on the ZIP loan; repayment is deferred until the loan term ends or you sell.

The CalPLUS FHA program is a specific financing option offered by the California Housing Finance Agency (CalHFA) tailored for first-time homebuyers. It combines a 30-year fixed-rate FHA-insured first mortgage with the CalHFA Zero Interest Program (ZIP) to provide funds for closing costs. Unlike standard FHA loans that require the borrower to cover all closing fees upfront, CalPLUS FHA bundles this assistance directly into the financing structure. While it offers significant upfront savings, the interest rate on the first mortgage is typically slightly higher than the standard CalHFA FHA program to offset the cost of the included closing cost assistance.