California Residential Real Estate Lawyers

CALHFA Loan For New 40 Year Mortgage

CALHFA ANNOUNCES NEW 40-YEAR FIXED MORTGAGE WITH BELOW MARKET INTEREST RATES

New Product Gives First-Time Homebuyers Three Mortgage Options at CalHFA SACRAMENTO, California – The California Housing Finance Agency, a state agency that offers Californians special loan programs for first-time homebuyers, announced today the introduction of a 40-Year Fixed Mortgage product. This offering is part of a continuing effort to help more Californians buy their first home with a mortgage they can afford. The new loan joins CalHFA’s successful 30-Year Fixed Mortgage and its 35-year interest only PLUSSM mortgage.

All three products are offered at below market, fixed interest rates. “The low fixed interest rate combined with a longer term on our new 40-Year Fixed Mortgage give comfort to first-time homebuyers,” said Theresa Parker, Executive Director of CalHFA. “Life is full of surprises, but this is one thing a homebuyer can count on with our 40-year product: a mortgage payment that stays exactly the same.” Last year, CalHFA expanded its mortgage products by introducing interest only PLUSSM. Today, more than a third of CalHFA’s loans are fixed rate interest-only loans, which give borrowers five years of interest-only payments before principal payments begin, and all 35 years stay at the same fixed rate. “The response to our expanded product offering has been tremendous,” Parker said. “While the 40-year mortgage may not be right for everyone, it does offer first-time homebuyers another way to help achieve their goal of homeownership.”

The fixed rate on the 40-year mortgage will initially be 5.75 percent, about one point below average market rates for 40-year mortgages. CalHFA also offers a discounted rate on mortgage insurance, and now, most CalHFA-insured loans have the added benefit of HomeOpeners®, a Mortgage Protection Program. With HomeOpeners, if a borrower were to lose their job, they’ll have help paying their principal, interest, tax and insurance payments for up to six months – and for as much as $2,500 per month. Best of all, HomeOpeners comes at no additional charge for the borrower.

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