As tightening underwriting guidelines and mortgage insurance company restrictions have all but disabled the CalPERS loan program, the personal loan option survives as a saving grace.

If you are an employee of a California Public School or Community College you may be eligible to use a CalSTRS 80/17 home purchase program to buy your home.  This program only requires a 3% down payment.

If you are a CalPERS member and not working in the education field, FHA offers a low 3.5% down payment option for the purchase of an owner occupied home.

In either case, you have the ability to take out a personal loan which is not secured by the the property as a second or third mortgage or silent mortgage, but is secured by your CalPERS retirement account.

By taking advantage of this program you will not be taking money out of your retirement account, but only using it as security for the personal loan.

Personal loan highlights:

• Can borrow up to 50% of contributed balance
• Maximum loan amount is $18,421
• Loan terms up to 15 years
• Can be used for down payment or closing costs

For complete personal loan guidelines click here

For more information about this financing option, the CalSTRS 80/17 or other home buyer programs - you are invited to attend one of our no cost on-line web classes covering these programs and more.

Click here for a complete schedule of upcoming online home buyer education classes

Click here for tools and resources from past online home buyer education classes

Eligible Applicants

Income eligible full time permanent K-12 public school teachers in San Jose or a qualified border school.

Program Criteria

* Cannot currently own a home as a primary residence.
* Have a gross income that does not exceed 120% of median income for Santa Clara County, adjusted for family size. Please refer to the Santa Clara County Eligibility Criteria sheet for the eligible income levels.
* Sign up and complete a required first-time homebuyer education class. Interested teachers are strongly encouraged to contact Neighborhood Housing Services Silicon Valley (NHSSV) at 408.279.2600. Additional non-profit homebuyer education courses are offered through ACORN Housing at 408.297.3087 and Project Sentinel at 408.720.9888. Your lender may also provide an approved homeownership certificate class. Be prepared to provide the City and your lender with a copy of the certificate of completion.
* Have an acceptable credit history (this also applies to co-borrowers) and a minimum credit score of 600.

Eligible Properties

Owner occupied, single-family homes, townhomes, and condominiums located within the City of San Jose municipal boundaries. The maximum home purchase price is $732,000. However, your total monthly housing cost cannot exceed the “Affordable Housing Cost” limit as shown on the Eligible Criteria sheet. Total monthly housing expenses include:

* loan principal and interest payment
* property taxes
* insurance
* homeowners association dues
* utilities (other than phone)
* maintenance and repair

Loan Limits

The maximum THP loan amount is $65,000 or $40,000 depending on your income.

Affordability Restriction

The property will be subject to a 45-year affordability restriction. The restriction requires either:

1. The property be sold only to an income-qualified household to an affordable price, or
2. The City and the borrower(s) share any increase in equity that accrues between the date of the original purchase and the date of sale.

For more information about this loan program you may either contact the city of San Jose or complete this simple online form.

If you are an employee or a California Public School or Community College you should also consider attending this no-cost on-line class - A Complete Guide to the CalSTRS 80/17 Home Purchase Program

Eligible Applicants

Income eligible full time permanent faculty & staff at San Jose State University (SJSU).

Program Criteria

• The FHP is NO longer limited to newly hired faculty members.
• Cannot own a home as a primary residence.
• Have a gross income that does not exceed 120% of median income for Santa Clara County, adjusted for family size. Please refer to the Santa Clara County Eligibility Criteria sheet for the eligible income levels.
• Sign up and complete a required first-time homebuyer education class. Interested homebuyers should complete a pre-purchase homebuyer education class through Neighborhood Housing Services Silicon Valley (NHSSV). Please call NHSSV at 408.279.2600 to schedule the workshop. Be prepared to provide the City and your lender with a copy of the Certificate of Completion
• Have an acceptable credit history (this also applies to co-borrowers) and a minimum credit score of 600.

Eligible Properties

Owner occupied, single-family homes, townhomes, and condominiums located within the City of San Jose municipal boundaries. The maximum home purchase price is $732,000. In addition, your total monthly housing cost cannot exceed the “Affordable Housing Cost” limit as shown on the Eligibility Criteria sheet. Total monthly housing expenses include:

• loan principal and interest payment
• property taxes
• insurance
• homeowner association dues
• utilities (other than phone)
• maintenance and repair

Loan Limits

The maximum FSHP loan amount is $60,000. The Housing Department may approve a lower amount, based on your housing-to-income ratio and the amount of liquid assets that will be available after the close of escrow

Loan Terms

The FSHP loan is due and payable in 45 years or upon transfer of the title.

Affordability Restrictions

The property will be subject to a 45-year affordability restriction. The restriction requires either:

1. The property be sold only to an income-qualified household at an affordable price, or
2. The City, Spartan Shops, and the borrower share any new increase in equity that accrues between the date of the original purchase and the date of sale. If the borrower prepays the FSHP loan and remains the homeowner, the affordability restriction will remain in effect.

For more information about this loan program you may either contact the city of San Jose or complete this simple online form.

If you are an employee or a California Public School or Community College you should also consider attending this no-cost on-line class - A Complete Guide to the CalSTRS 80/17 Home Purchase Program

Here is an article that appeared in the OC Register on November 18th, 2008:

“Bargain-basement sales helped pull down home prices in the SoCal region last month and boosted the number of transactions by a record 67%, DataQuick reported today.

The median price of a Southern California home fell to $300,000 in October — the lowest since April 2003 and down 41% below the peak price hit in the spring and summer of 2007.

The record gain in sales was attributable to very weak sales last year and high foreclosures this year. Since sales fell to record lows a year ago — remember the twin meltdowns in the mortgage market last year? — October’s gain was a percentage record. But at 21,532 transactions, the total still was 12% below average, DataQuick reported.

Record foreclosures also boosted sales while pulling down prices. DataQuick’s figures show that half of October’s sales were recently foreclosed homes. In Orange and Los Angeles counties, foreclosed homes accounted for four out of 10 sales. Lower-priced neighborhoods, where foreclosures predominate, made up the lion’s share of last month’s sales figures.

For example, a third of all SoCal sales last month occurred in the Inland Empire, where foreclosures accounted for two out of every three transactions. The median home price in those counties dropped below $230,000 last month, or almost half of the median sale price at the market peak.”

Once again, It is my contention that this is the bottom of the market for most areas in the State of California.  Credit continues to be available for first time home buyers and there is no better time than now to take advantage of this market.

If you would like more information about foreclosed homes in your area and low to no down payment loan options available to you, either give us a call at 1-866-667-6724 or complete this simple on-line form for more information

If you have already attended one of our on-line classes then you know that this loan program simply does not have enough lenders that are raving fans.  My suspicion is that because CalSTRS sets the Rates and Fees for these loan programs, many lenders seem to have the attitude that it’s not worth their time to offer the CalSTRS 80/17.

We are home ownership experts specializing in California Teachers, Public employees and First Time home buyers.  As a result of our on-line classes about the CalSTRS 80/17 we get to talk to a lot of home buyers that never knew this program existed.

Working with a lender that specializes in these loan programs is the very best way to make sure you don’t get caught by surprise during the process.  These loans are not complicated but they are significantly different in the way they are structured.

The last thing you want is to let a lender “experiment” with your family as they try to learn about how this loan works.  I am confident that there are many other lenders out there that have an expertise in this loan program, just make sure that you’re working with one.

The closing costs on a CalSTRS 80/17 are different from an FHA loan due to the fact that CalSTRS does not allow the lender to “roll in” closing costs into the interest rate.  You are guaranteed by CalSTRS that the lender can not manipulate your interest rate in order for them to make more money.

The good news is that you always have full disclosure about what the rates are - the bad news is, the closing costs associated with a high loan to value loan trickle down to the bottom line of your good faith estimate.  These fees are by no means exorbitant, especially when compared to an FHA loan and the Mortgage Insurance Premium (MIP) that is due both upfront and monthly.

Beware of bait and switch tactics that try to push you toward a FHA loan.  This is becoming more and more common as more eligible borrowers are asking about the CalSTRS 80/17.

The “bait and switch” usually goes something like this:

• You are pre-approved for the CalSTRS 80/17 with a lender
• About two weeks into the process you are informed that the underwriting guidelines changed
• An FHA loan is presented as the solution to this challenge

What you need to know about a CalSTRS 80/17 is that the approval is automated and instant.  If you have a loan approval and the rate has been locked, the underwriting guidelines can not be changed retroactively.

Get a second opinion on the GFE if you are even remotely concerned about your lender’s expertise in this program.  It’s not worth the losing your deposit and possibly your dream home because the bank is trying to make a few extra bucks off you.  Buyer beware always.

I’m not saying take my word for it either.  But if i can help to educate you about the process and empower you with the knowledge of how these loans work, then there’s a possiblility that I can help one more family move confidently forward toward the American dream of homeownership….and I call that a good day.

If you have any questions about the CalSTRS loan program, feel free to contact us at 1-866-667-6724 or you can get more info here.

What struck me as the most telling statistic from this story is the fact that the median home price in the six county region dropped 33.2% from $462,000 to $308,000.

The Southern California region they are referring to include Riverside, San Bernardino and San Diego counties which were some of the hardest his areas of mortgage fraud and ultimately is also among the nationwide leaders in foreclosures and short sales.

This is another testament of the fact that this is an incredible buyer’s market for those that qualify for home loan financing.

For a more information about the Affordability Index and Median Home Prices in California, join us for one of our informative web classes.  All of the classes currently scheduled discuss the CalSTRS 80/17 home purchase program in detail as well as reviewing Median Home Prices and the Affordability Index.

Click here to Register for one of these Web Classes

“Hi Scott, I am in the process of buying a home and was qualified for a Teacher loan (Extra Credit Teacher Program or CalSTRS 80/17) and my loan officer just told me that the underwriting guidelines have changed and I no longer qualify for this program.

I was doing some research on the internet and ran across your blog.  Have there been any changes?  I can’t seem to find anything to back up what i’m being told by my loan officer.  Please help!”

This is not an actual conversation ver batim but I assure you it’s really, really close!

Here’s what the “other guys” don’t want to tell you - They don’t like to offer these loans because…ok, brace yourself…….drum roll please……..They don’t make a lot of money giving you one of these special loans.

Can you believe it?  I know you’re shocked that a loan officer or lender would actually ignore the best interest of their client just to make more money for themselves……Come on Scott, that doesn’t happen.

I know I sound a little irritated and even bordering on hostile as I write this and I guess it’s because I am.

I sincerely hope that you have run across this post because you didn’t take “no” for an answer.  I want you to know that although there are often changes in loan qualification guidelines, there have been relatively few changes in these programs.

The reason why there is little information out there about these programs is that lenders and loan officers are not eager to work for a reasonable wage and help a segment of our community that quite frankley does not get enough credit for the contributions you make to society.

Ok, I feel a little better now that I’ve gotten this off my chest.  I’ve put together a bunch of resources for you and we hold free web classes regularly to educate teachers, public employees and first time home buyers about these special programs.

Click Here for these valuable resources

There are links all over this site to contact us for more information or you can call my cell phone anytime.  I can be reached at 714-336-8286.  The office number is 866-667-6724 and anyone here will give you an honest answer and look out for your best interest.

Interest Rates have dropped below 6% in the first time in a very long time - you can check CalSTRS interest rates on their website anytime - Here is a link to the CalSTRS Interest Rates page

One of my favorite features of the CalSTRS 80/17 home purchase program is the one time free float down.  What this means is that after you have locked your interest rate, once you are in escrow, and the interest rates drops as they did this week, you are allowed to reduce the rate at no charge.

This program just keeps getting better and better if you’re a Teacher or Employee at a California public school or community college.  If you would like more information about this program give us a call today at 1-866-667-6724.

Chairman Frank and HUD Secretary Preston Negotiate DPA Agreement

Chairman of the House Financial Services Committee, Barney Frank, has discussed publicly the fact that he has negotiated an agreement with HUD Secretary Steve Preston that will provide for the continuation of privately funded downpayment assistance.

The agreement allows HUD to impose risk-based pricing on downpayment assistance transactions which provides Secretary Preston the fiscal protection he seeks for the FHA insurance fund.

According to an Inman News article published today, Chairman Frank is quoted as saying “The FHA loved the ban on down-payment assistance (but) hated the ban on risk-based pricing,” Frank said at Saturday’s hearing. “That seemed to me to offer an opportunity. So (HR 6694) will replace both bans with middle ground — and it will pass the House, I can guarantee you. What you want to do now obviously is talk to your senators. We think it will go through there — it has the approval now of the Secretary of HUD.”

Thanks to the advocates of downpayment assistance, there is significant momentum in this direction. Nehemiah urges all supporters to continue their campaign to save DPA by contacting their Senators and request a swift passage of pro-DPA legislation.

Read the entire article:http://www.inman.com/news/2008/09/10/congress-weighs-reprieve-seller-funded-gifts

Stay tuned for news on this subject - It looks like we may see something by October 1st if we’re lucky!

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!