California's Answer for the Sub-prime Lending Melt down.
The answer to this is a very much overlooked first-time home-buyer program that solves this problem for many entry-level buyers with low FICO scores. The CALHFA (California Housing Finance Agency) program is sponsored by the state of California and has many features not available anymore through sub-prime lending.
To start, the program allows for 100% financing with only a 620 fico score. In the current lending environment, most programs now require at least a 660 FICO score. Aside from the low FICO score requirement, loan approval can be accomplished with the buyer's debt to income ratio exceeding 50%. CALHFA offers the buyer below market interest rates on a loan that has a fixed rate of 30, 35, and 40 year terms. With this type of loan, the consumer will never have to worry about his loan changing because it is not an adjustable rate mortgage product.
Currently available is an interest only loan with a 6% rate fixed for 35 years. This is a type of loan product in which the buyer gets a loan once and never has to think about refinancing the home. This type of loan program does require PMI (Primary Mortgage Insurance), but once you have reached a 20% equity position in the home and two years have gone by, you can eliminate the mortgage insurance and lower your payments even more, which is truly a better option for most homebuyers.
CALHFA also has available their HICAP (High Cost Area Home Purchase Assistance) program with $7,500 of assistance for down payment and their CHDAP (California Homebuyer's Down-payment Assistance Program), which offers an additional 3% of the purchase price for down payment or closing cost assistance. Many other community silent (no payment) second, third, fourth, and fifth loans can also be added to the loan to further lower the payments, by reducing the amount of principal that the buyer is borrowing. Another very unique feature of this loan program is the Mortgage Protection Program. This program can make up to six months of mortgage payments if the borrower becomes involuntarily unemployed and is receiving state unemployment benefits.
After reading, this I hope you have come to the conclusion that although buying your first home can be challenging in the aftermath of the sub-prime lending shakeup, there is still hope and with the right guidance from a knowledgeable professional, first-time housing can still be affordable.
Source: Free Articles from ArticlesFactory.com
Related Tags: for, melt, lending, the, down, answer, sub-prime, californias
Co-written by Randy Nathan and James Dedolph, creators of HomeSniffer.com where you can find Homes for Sale in San Diego and LoanSniffer.net where you can find the best rate and terms for Home Loans in San Diego. Both of these sites are a good resource for information about San Diego Real Estate. Your Article Search Directory : Find in Articles
Recent articles in this category:
- The Secrets to Getting Low Down Payment Car Insurance
Upon purchase of a new car, there is almost always a requirement to buy an auto insurance policy as - The Wisdom Behind Auto Insurance Comparison Quotes
No one in his right mind would not go for a good deal. In fact, everyone is out on their feet and ru - The Benefits of Auto Insurance Comparisons Florida
Insurance can be expensive. This is something everyone knows about especially in the sunny state of - Auto Insurance Florida: The No-Fault Policy
There are different kinds of car insurance offered by a wide range of providers today. Different sta - Finding the Cheapest Auto Insurance Companies
Everyone is asking and searching for the cheapest auto insurance companies available today. Consider - How do You Compare Private Health Insurance Cover in Australia?
Deciding what is the best and most affordable private health insurance cover can be easy if you take - How Payment Protection Insurance Was Mis-Sold
For over six years the issue of Payment Protection Insurance (PPI) and how it was mis-sold to custom - Finding Quotes For Auto Insurance Online
One of the many concerns when you are shopping for auto insurance is being able to get access to quo - How You Can Find the Best Auto Insurance Online
When it comes to renewing your car insurance you are going to quickly discover that there are a numb - Guidelines For Searching For Auto Insurance Online
The internet can be a great source of discounts and values related to auto insurance. However, many
Most viewed articles in this category:
- Trading Forex With Pivot Points
Forex Pivot Point Trading are used today by Forex Traders and are calculated on the previous days mo - Where To Search For Free Grants
Where do you look for free grants? The search must be thorough or it could be an exercise in futilit - The Connection Between High Blood Pressure and Salt
We are a society of Salt Addicts. It cannot be denied. When you look at the things we do and the pla - Tips For Avoiding HYIP Scams
Before knowing about HYIP Scams, refer to the functioning of HYIP or "High Yield Investment Programs - Getting Credit After Bankruptcy
Consumers do not have to live sans credit following a bankruptcy. By following certain steps consume - Tips For Choosing A Credit Card
Are you looking for that perfect credit card? If so, you may be confused about what exactly to look - Cheap Car Insurance For Teens Online
Many elements determine a car insurance policy. Car insurance companies look at the person's age, hi - What Exactly Is Free Grant Money?
You can apply for free grant money from various government agencies. But where exactly does this mon - Small Business Owners Marketing and Customer Service
Marketing can be time-consuming, but it doesn't have to be hugely expensive now, thanks to the Inter - Apply Online For A Credit Card - How To Choose A Card?
The best type of credit card for you will be dependant on how you intend to use the credit card. Are