Homebuyers are finding their pot of gold at CHFA
Industry news in the finance sector has been scary to say the least. Home buyers are
finding themselves with less and less options each passing day. One steady financing resource for purchase funds in Colorado is CHFA.
I received an excellent email from Mark Afman a Senior Loan Consultant with Universal Lending explaining CHFA's offerings. Mark has given me permission to post his email:
CHFA is a non-profit investor that sells tax free municipal bonds to fund their
loans and is there specifically to help low to middle income buyers into homes.
They allow FHA and conforming loan programs to be funded through CHFA. The CHFA
program is the antidote for the predatory lending practices that are now under
so much scrutiny. CHFA sets the Interest rate so a lender could not charge a
higher interest rate even if they wanted to and CHFA caps the closing fees that
a lender can charge so CHFA is considered a loan program that protects home
buyers.
There are 4 programs that CHFA offers. All programs require the
buyer to attend a CHFA approved, free first time buyers education
course.
1) MRB First Step: This is the program for first time buyers
(someone that has not had an ownership interest in a home for at least three
years). This is a 30 year fixed loan. There are income limits, for example a 2
person family can not make more then $71,400 a year. There are also purchase
limits, for example in the Denver Metro area, the limit is $365,100. CHFA also
offers a 3% "Silent 2nd" for down payment assistance. This 2nd mortgage has no
interest or payments due for the life of the loan but is is a lien against the
property so when the buyer is done with it they have to give it back. So if the
buyer sells the property, refinances the mortgage, or lives there for 30 years,
the original 3% must be paid back to CHFA. This effectively offers the buyer
100% financing. However, if a buyer uses the CHFA 2nd mortgage for down payment
assistance, the interest rate on the 1st mortgage will be 1/4% higher then if
they bring their own 3% down payment. The buyer is required to put in a minimum
of $1,000 in to the transaction. The interest rates are set by CHFA at an
affordable level usually below the normal prevailing market rates. They also cap
the amount of closing costs a lender can charge at $600 plus a 1% origination
fee. For current rates and information on the training, etc. go to
www.CHFAinfo.com
2) Taxable Home Opener: This program is very similar to
the MRB First Step program but it allows for non-first time buyers to use the
CHFA advantages. The income limits are higher, for example, a 2 person household
needs to be under $82,100 and there are no purchase limitations. The rates are
about 3/8% higher on the Taxable Home Opener program then the MRB First Step
rates but it offers a safe 100% financing option to those that do not have a
down payment saved up.
3) HomeStretch: This is a new CHFA program for
buyers that may need help keeping their payments lower. It is a 40 year fixed
loan and has lender paid mortgage insurance, unlike the other 2 programs. The
rates are higher by about 7/8% but with the combination of a longer term and no
MI, the payments are generally lower. This program also allows for non-first
time buyers to use it. It can also be used for refinancing. This program also
allows for Involuntary Unemployment Insurance which pays up to $1500 a month
against the mortgage payment for up to 6 months.
4) Home Access: This
program is specifically for buyers that have a disability or the parents of a
child with a disability. This is for low income, first time buyers. You can find
more information at CHFA.
Looking to Denver real estate? Call me! (303-589-2022) Need to finance a home? Call Mark Afman 303-759-7392.
Thanks Mark! We all appreciate your sharing this excellent advice.
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