Every day seems to bring new challenges for new home buyers looking to purchase homes in the State of California.  As home prices drop to seemingly jaw dropping levels California Teachers and Public Employees are making up a large percentage of first time home buyers entering this market.

If you do not belong to special organization like CalSTRS or CalPERS there are still programs available to purchase with little or no money down, but not nearly the options available to members of these organizations.

CalSTRS made a startling announcement earlier this week that it have successfully defended an important underwriting guideline with Fannie Mae that has resulted in many more California Teachers and Employees being able to qualify for the 80/17 loan program.

There is no program available anywhere in the State or Country that has the benefits of this loan program.  No mortgage insurance, low interest rates, low fees, deferred payments on down payment for 5 years - Inquire here for more information on this program.

CalHFA still offers great programs to first time home buyers, and specifically to Teachers working in high priority (title 1) schools in the State of California.  The Extra Credit Teacher program provides a 3% silent second mortgage with no payments due for the life of the first loan.  Teachers that qualify for this loan program may have to come in with as much as 2% down payment, but as little as nothing down with the use of other down payment assistance programs available through CalHFA and it’s affiliate DPA program.  Inquire here for more information on this program.

CalPERS offers a loan program that allows you to borrow up to 95% loan to value plus take a personal loan of up to $18,000 or half of your CalPERS value to cover the additional 5%.  The result is that you can borrow up to 100% of the purchase price.  Inquire here for more information on this program.

For more information on any of these programs feel free to call us at 866-667-6724 or Inquire here for more information.  To find out if you qualify for a low or no down payment home loan you can also complete this simple, online loan application and get approved today!

August 18th, 2008 - Important Update: Many of the lenders are cutting off Seller Assisted Down Payment Grants effective immediately.  The last day FHA will buy a loan with Nehemiah is October 1st, 2008.

As the fight for Nehemiah continues do not lose hope, there are still many down payment assistance programs available if you are a member of CalSTRS, CalPERS, or if you are a first time home buyer you can look to CalHFA for down payment assistance.

If you’re unsure what program you might qualify for, complete this simple form and we will get to work looking for a down payment assistance program to meet your home buying needs.

If you haven’t written your representative to tell them that you support keeping Nehemiah, AmeriDream and HART available to home buyers, please read this and follow the link to voice your support!

Nehemiah, Ameridream, HART and other private charities that offer seller assisted down payment grants score a win with the introduction of H.R. 6694.

This proposal counters the legislation passed last week that puts an October 1st, 2008 cutoff for seller assisted down payment assistance programs under title II of the National Housing Act (H.R. 3221)

H.R. 6694 calls the authorization of risk based mortgage insurance premiums for certain mortgagors that meet Fico requirements of 620 and above.

I believe this bill will move quickly through the process and be the saving grace of these valuable charities. This is responsible legislation and necessary to continue to stimulate the U.S. Housing market in a responsible way.

For more information, to take action against the ending of Nehemiah and programs like it and to follow the progress of this new legislation you can go to Nehemiah’s website here.

When I first wrote about H.R. 6694 it was after I wrote to my representatives through the Nehemiah and the DPAgroundSwell.org website in support of the bill - Received this email today from Dianne Feinstein.  I have to say that I at least appreciate the attempt to personally address me and speak specifically to the subject of my original contact which was Seller Paid DPA.

Take Action Now - Use this easy tool to email your representatives and tell them that you want to save Nehemiah!

Dear Mr. Schang:

I am writing in response to your letter regarding down payment assistance programs. Thank you for taking the time to write, and I welcome this opportunity to respond to your concerns.

On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act. This legislation, which provides critical relief for American homeowners facing foreclosure, also contains a provision prohibiting Federal Housing Administration (FHA) program participants from using down payment assistance programs in which the seller financially benefits from the transaction.

The U.S. Department of Housing and Urban Development (HUD) Inspector General, the Government Accountability Office, and the Internal Revenue Service have cited serious problems with some seller-funded down payment assistance programs that have lead to substantial losses for FHA. The agency had $4.6 billion in unanticipated long-term losses in its annual re-estimate this year, primarily as a result of the increased amount of seller-funded loans in its portfolio. Foreclosure rates for seller-funded down payment assistance loans have been found to be three times higher than other FHA loans.

You may be interested to know that on July 31, 2008, Representative Al Green (D-TX) introduced the “FHA Seller-Financed Down Payment Reform and Risk-Based Pricing Authorization Act of 2008″ (H.R. 6694). The bill would reinstate FHA seller-funded down payment assistance for individuals with certain credit scores. Currently, H.R. 6694 is pending consideration in the House Committee on Financial Services and a Senate companion bill has not been introduced. Given the major concerns of the Senate Banking, Housing, and Urban Affairs Committee with seller-funded down payment assistance programs, it is uncertain if similar legislation will be considered in the Senate. Please know that I will keep your views in mind should the Senate consider this legislation.

Again, thank you for your letter. If I can be of further assistance, please contact my Washington, DC office at (202) 224-3841. Best regards.

Sincerely yours,

Dianne Feinstein
United States Senator

Further information about my position on issues of concern to California and the Nation are available at my website http://feinstein.senate.gov/public/. You can also receive electronic e-mail updates by subscribing to my e-mail list at http://feinstein.senate.gov/public/index.cfm?FuseAction=ENewsletterSignup.Signup.

Program Overview

The Teacher Next Door Loan Program provides Downpayment Assistance loans to credentialed Teachers employed by the San Francisco Unified School District. The loans are forgivable according to the years of service the teacher remains in the school district.

Borrower Eligibility:

To be eligible for a TND loan, a borrower must be a credentialed teacher currently employed by the San Francisco Unified School District, and have a combined household income of no more than 200% of the AMI of SFMA.

First-time homebuyer: The TND loan is for the purchase of the teacher’s first property in San Francisco. The property must serve as the teacher’s principal residence (be owner occupied).

Homebuyer Education Requirement: Borrower will be required to complete a first-time homebuyer education course through one of MOH’s 5 approved housing counseling agencies. A certificate of completion of homebuyer education must be included with the application package.

First Mortgage: All City loan approvals are made in conjunction with a first loan commitment from a bank or mortgage lender.  The loan can be fixed or adjustable interest rate loans. The mortgage payment should include principal and interest, as long as it does not have interest only, option ARM, balloon or negative amortization payment options.

Debt-to-Income Ratio: Applicants monthly housing debt, including property taxes, property insurance, and if applicable mortgage insurance and homeowner’s association dues cannot be less than 38% of the household’s gross income. The ratio of monthly housing costs, plus all other household monthly debt (including credit cards, car payments, etc.) should not exceed 45% of the household’s gross income.

First time homebuyer counseling is required for all City Downpayment Assistance Loans

Property Eligibility

Properties purchased with TND funds must be single-family residences units in the City of San Francisco, which include: detached single-family house, condominiums and townhouses.

Maximum Loan Amount

The loan amount available for TND loans is $20,000.

Loan Terms:

The maximum loan amount under the TND program is $20,000. The loan may be used for either closing costs or downpayment. There is no interest, nor shared appreciation. TND loans may be layered with DALP,  City Second loans, and used for the purchase of BMRs and Condo Conversion units, if the teacher also meets the income eligibility criteria for those programs. If the teacher moves out of the City and County of San Francisco or leaves the San Francisco Unified School District within 5 years of the date the loan is issued, the loan must be paid back in full. After year five, the loan is forgiven at a rate of 20% per year, and at the end of the 10^th year, the loan is forgiven in its entirety. The following chart illustrates repayments for TND loans:

If the property is sold or the teacher leaves the SFUSD, then the following is due back to the City:

1. Refinance/Subordination – The City loan can be subordinated to refinance the existing first mortgage for a lower interest rate and better loan terms as long as no cash equity is taken out of the property. All refinances must meet MOH’s subordination requirements and be approved by MOH.

Owner Occupancy Requirement

· The borrower must occupy the purchased property as the primary residence within 60 days after close of escrow.

· Properties that have received City funding must remain owner occupied throughout the term of the loan. Compliance monitoring will be performed and documented proof of occupancy required at intervals determined by the Mayor’s Office of Housing.

To get more information about this Program

• Request More Information
• Apply NOW! - Get Pre-Approved
• Find a Local Realtor
• Call Toll Free:  866-667-6724

The following information can be found on the CalPERS member site here and has been summarized and reproduced here for your convenience.

The CalPERS Member Home Loan Program offers a variety of loan options to help you purchase your home. There is no requirement to be a first-time homebuyer, no minimum vesting requirement, and you are eligible for the program on your first day of employment.

If you already own a home, it’s easy to use the Program to refinance too. Whether your goal is to consolidate your debts, make home improvements, shorten your loan term, or just lower your monthly mortgage payment, the program can work for you.

The CalPERS Member Home Loan Program has a variety of loan products and options that can help make the home buying process more convenient than ever. Each feature is designed to help you get the most value out of your loan by providing you with a fit tailor made for your individual mortgage needs.

60-Day and 90-Day Rate Protection
At the time of your loan application, you can lock in your interest rate for 60 or 90 days and get protection against market fluctuations. Other loan programs that offer shorter lock periods can leave you with a higher rate at close of escrow – resulting in higher monthly mortgage payments.

Two FREE CalPERS Float Down Opportunities
With the 60-day and 90-day interest rate locks, you’ll receive the lowest CalPERS interest rate on three key dates - date of loan lock-in, date of loan approval, and date the loan documents are drawn.

30-Day Rate Lock
You can choose to lock your interest rate for 30 days instead 60 days. Although the float down feature is not available with this option, you’ll get the benefit of a competitive 30-day rate.

The Conforming 5/1 LIBOR Adjustable Rate Mortgage
The Conforming 5/1 LIBOR ARM is fixed for the first 60 months, with rate adjustments after that time. Adjustable rate mortgages offer lower initial interest rates and can often help you qualify for a larger loan amount.

Low-to-No Down Payment Programs
CalPERS offers several financing options that have either low or no down payment requirements. The MyCommunityMortgage™ and Flexible 100™ require as little as $500 from your own funds for the down payment.

Interest Only Feature
If you are just starting off, would like greater purchasing power, or like the idea of lower initial monthly payments, the Interest Only Feature could be right for you. With initial interest-only periods of 7- to 10-years, these fixed rate and adjustable rate mortgage loans are available for home purchases or refinancing.

100 Percent Financing
We offer several options to purchase a home with no out-of-pocket costs for the down payment. Our 100 financing options could let you secure up to $500,000 for a down payment. We even offer down payment assistance on jumbo loans.

Program is Available Nationwide
Members interested in purchasing in states other than California are still eligible to use the program.

No Prepayment Penalties - Any CalPERS Mortgage Loan gives you the option to make early principal payments with no penalty. This feature of the program not only gives you the ability to build equity in your home but, because these payments are immediately applied to your loan’s principal balance, it also saves you money.

For more information about this loan programs or others available to California State Employees and Teachers you can choose either of these simple and secure options -

Request additional information - Complete this short form request for more information to help narrow down your options

Get Approved Now! - Get an approval and start making offers on home by completing this application and submitting supporting documentation.

If you would like to speak to a specialist now, give us a call at 866-667-6724

In such a volatile market as we’re in right now, on a day when conventional interest rates went up .125%, The California Housing Finance Agency in an unprecedented announcement reduced interest rates across the board.

Rate Reductions are as follows:

30 Year Fixed

• Moderate Income Areas Reduced .125% to 6.75%
• Low Income Areas Reduced .25% to 6.5%

35 Year interest only PLUS

• Loan Amounts of $450,000 or Less Reduced .125% to 7%
• Loan Amounts in excess of $450,000 Reduced .25% to 7.375%

40 Year Fixed Mortgage

• Reduced .125% to 7%

Extra Credit Teacher Program

• Reduced .25% to 6.25%
• ECTP Down Payment Assitance - 5.25% (interest waived after 3 years)

With the CalHFA Community Stabilization Home Loan Program standing at 5.5% for a 30 Year fixed rate with ZERO down payment required (100% One loan financing with reduced mortgage insurance), CalHFA remains as one of the few remaining reliable and always available first time home buyer programs that allow over 90% loan to value.

Depending on your qualification, CalHFA has loan programs that allow for 0%, 1% & 2% down payment making this a very realistic alternative to the 3.5% down payment requirement (as of October 1st)

For additional information about these CalHFA loan programs feel free to contact me at Scott@myporchlight.com or you may call me on my cell phone anytime at 714-336-8286.

The major mortgage insurance companies announced on Friday, August 8th, 2008 that they will no longer offer mortgage insurance on any loans that exceed a total of 90% loan to value in California, Arizona, Nevada and Florida.

The only options left for “low down payment” purchase loans in California are FHA, CalHFA Extra Credit Teacher Program and the CalSTRS 80/17 home purchase loan.

It’s really a no brainer once you compare these loans side by side:

CalSTRS compared to CalHFA

• You do not have to be a first time home buyer with CalSTRS
• There are no income limits with CalSTRS
• CalHFA currently has an interest of 6.25%, CalSTRS 6.625%
• CalSTRS does not require Mortgage Insurance - CalHFA does

CalSTRS compared to FHA

• No mortgage insurance with a CalSTRS loan
• No upfront PMI with CalSTRS
• Both require only 3% down payment

This, in my opinion continues to be the best loan option available…PERIOD.

Did you know that the only requirement is that you have a pay stub from a Calfornia Public School or Community College?  You do not even have to be a member of CalSTRS.

I am holding California Teacher Home Buying Workshops for any schools or organizations in California.  I will be in San Deigo next week.  If you would like to hold a workshop at your school or other forum, feel free to contact me for details.

You may reach me on my cell phone at 714-336-8286 or email me at Scott@MyPorchLight.com