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Forgivable Equity Builder Loan
Homebuyer Education
CalHFA believes that home equity is one of the best ways for families to build wealth and pass it on to their children. Forgivable Equity Builder Loan provides first-time homebuyers with a loan up to 10% towards the purchase of their home. The loan is forgiven if the borrower resides in the home continuously for five years.
Forgivable Equity Builder Loans can only be used with CalHFA's first mortgage.
Forgivable Equity Builder Loan For First time Homebuyers in California
Program Eligibility
Forgivable Equity Building Loans are available if you meet the requirements for Borrower and Property Requirements. Talk to one our Preferred Loan Officers if you need more details.
Requirements for Borrowers
Be a first-time homeowner. Check out the definition of first-time homebuyer.
The property can only be occupied as your primary residence.
CalHFA borrowers are required to complete homebuyer educational counseling and receive a certificate of completion from an eligible homebuyer counselling organization.
Fannie Mae income limits in your county
CalHFA's Income Limits can be found here.
Contact one of our preferred loan officers for more information.
Property Requirements
A single-family, one-unit residence that includes approved condominium/PUDs
You may be eligible to rent guest houses, granny apartments or in-law suites.
Manufactured housing may be permitted
Condominiums must comply with the guidelines of the first mortgage
Potential Tax Consequences
CalHFA loan servicing issues borrowers a 1099 each year when the loan has been forgiven partially. Borrowers should consult their tax advisor.
Forgivable Equity Builder Loan Interest Rates
What is the interest rates?
Forgivable Equity Builder Loans offer a zero-percent interest rate. However, you will have to repay some of the loan if your home is occupied for less than five consecutive years. Your financial situation and lender fees will affect the interest rate on CalHFA's first mortgage. Daily interest rates can also fluctuate. For an accurate rate quote on this program, we recommend that you consult a Preferred loan officer.
Forgivable Equity Builder Loan
Education for Homebuyers
CalHFA strongly believes that homebuyer education is crucial for homeowner happiness. Therefore, CalHFA requires homebuyer education for all first-time homebuyers who are enrolled in a CalHFA program.
Who must take the Homebuyer Education Counseling Course?
Only one borrower is allowed to be the first time borrower for each loan transaction.
How can I enroll in this education- and counseling program?
ONLINE: CalHFA only accepts the eight-hour eHome Homebuyer Education & Coaching course. Frameworks is an online course that costs $99. They do not provide 1-on-1 counseling.
IN-PERSON, VIRTUAL: Live homebuyer education and counseling in-person or virtually through NeighborWorks America oder any HUD approved housing counselling agency
(Fee: The cost varies depending on the agency)
Forgivable Equity Builder Loan
How to Apply
How do I apply to this loan program?
CalHFA does not offer mortgage products directly. Instead, private loan officers have been approved and trained by our Agency. These loan officers can assist you in the home buying process and provide information about CalHFA programs.
For assistance in finding a loan officer close to you, please visit the Find A Loan Officer tab.
What documents should you have on hand when contacting a loan officer?
You may need this list of documents to assist you in answering the questions they might ask you when you first contact a lender.
- Pay stubs
(most recent full 30 day paystub) - Statements from the bank
(last month bank statement) - Employment history
- Previous tax returns
(The last 2 years of W2) - Drivers license / ID Cards
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