Homeownership Programs
The CalFHA loan program provides below market interest rates and subordinate financing options for first time homebuyers. These loans are subject to income and sales price limits which may vary depending on the location and property type (resale and new construction). The program consists of two loans:
1. Up to a 97% LTV CalHFA below market 30 year fixed-rate loan, and
2. A 3% CalHFA down payment assistance loan under the California Housing Assistance Program (CHAP). The second mortgage is offered for 30 years at 5% simple interest.
Borrowers, who qualify, can use additional down payment funds; including one or more of the following, however, the total maximum loan(s)-to-value cannot exceed 100%.
A. A CalHFA deferred-interest loan under the High Cost Area Home Purchase Assistance Program (HiCAP), up to $25,000
B. A forgivable interest CalHFA loan under the Extra Credit Teacher Program (ECTP), for credentialed teachers and principals at low performing school), up to $15,000. Loan is for 30 years at 5% fixed.
C. A 3% CalHFA down payment assistance loan under the California Homebuyer's Downpayment Assistance Program (CHDAP)
All payments are deferred on the second mortgage and other subordinate financing, until one of the following happens: the CalHFA first mortgage becomes due and payable; the first mortgage is paid in full or refinanced; or, the property is sold.

High Cost Area Home Purchase Assistance Pilot Program (HiCAP)
The High Cost Area Home Purchase Assistance Pilot Program (HiCAP) is designed to assist first-time homebuyers in the highest housing cost areas of the state. Eligible counties are: San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa & Sonoma.

Extra Credit Teacher Program (ECTP)
This program is intended to assist low performing schools recruit and retain credentialed school staff to increase their academic standing and thus provide pupils with high quality education If an eligible borrower remains employed at a low performing school continuously for three years, the interest rate on the second loan will be reduced progressively to zero percent (0%) and remain there for the term of the loan.
Borrower must be a holder of an appropriate credential. An eligible teacher, administrator, or staff member is any person who holds one of the credentials listed and issued by the California Commission on Teacher Credentialing.

California Homebuyer's Downpayment Assistance Program (CHDAP)
This program offers a deferred-payment junior loan of an amount up to the lesser of three percent (3%) of the purchase price or appraised value. Homebuyers are able to use these funds to help with their downpayment and closing costs without the need to make monthly payments on the loan. Interest will be calculated at 3% simple interest. Homebuyers using a CalHFA first mortgage may combine the assistance with a California Housing Assistance Program (CHAP) loan, High Cost Area Home Purchase Assistance Program (HiCAP) loan. The CHDAP loan cannot be
combined with loans under CalHFA's Extra Credit Teacher Program.

Borrower Requirements
In order to qualify for a CalHFA loan, certain eligibility requirements must be met. They are:
>Be a first-time homebuyer, which is defined as a person(s) who has not had an ownership interest in their primary residence during the previous three years. (Requirement is waived if property is located in a Federally designated "Targeted Area".) *
> Have an annual household/family income that does not exceed income limits for the family size and county in which the home is located.
> Property must be owner-occupied for the term of the loan or until sold.
> Meet credit, income and loan requirements of the CalHFA lender and the mortgage insurer.
> Be a citizen or other national of the United States or a qualified alien as defined by the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)

*Targeted Areas: Census tracts in which 70% or more of the families have income, which is 80% or less of the statewide median family income

.Home Ownership Sales Price Limits

Home Ownership Income Limits

California Homebuyers Downpayment Assistance Program (CHDAP)

RECAPTURE
Provision for potential recapture. If you sell your home within the first nine years after purchase, there is a provision for the potential recapture
of a portion of the MCC credit you've received. The maximum recapture tax is the lesser of: 6.25% of the largest principal amount of the mortgage loan or 50% of the gain on the sale of the home.

RECAPTURE
Borrowers of tax-exempt financing receive the benefit of a below market interest rate. The federal government considers this to be, in effect, an indirect subsidy. The federal government uses the recapture tax to recoup some of the subsidy from the gain, if any, on the sale or transfer of the home.
What conditions make a borrower liable for recapture
First: A sale or transfer of the home must occur within nine years from the later date of purchase or the date of bond issuance: after that time there is no recapture tax
Second: A borrower's income must be above the "Adjusted Qualifying Income" limit, if income limits remain within federal limits there is no recapture tax.
Third: A gain on the sale or transfer of the home must occur. If there is no gain, then there is no recapture tax.
Maximum Recapture
The maximum recapture tax is 6.25% of the original principal balance of the loan, but can not exceed 50% of the gain. The maximum recapture amount increases during the first 5 years of ownership to its maximum in the fifth year. The amount then decreases 20% per year through the ninth year. If the sale occurs after the 9th year, there is no recapture tax.
What if the loan is refinanced?
How a refinancing or repayment of the loan in full affects recapture depends on when the refinancing or repayment in full occurs. If the borrower refinances and later sells the home within the nine year recapture period, the "Holding Period Percentage" formula is used to determine recapture tax. If borrower refinances but does not sell within the 9 year recapture period then there is no recapture tax.
In case of a divorce, who is responsible for the recapture tax?
A divorce settlement is not a sale or transfere for the purpose of recapture. Whoever receives the home in the divorce settlement pays any recapture tax due as a result of a subsequent sale or transfer if within the nine year period.
Is recapture due if the borrower dies within the nine year period?
No. A death or transfer is not a sale or tranfare for the purposes of recapture.