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.