When your California first-time buyer can't meet the 680 FICO bar for CalHFA Conventional, CalHFA Government is the answer. An FHA first mortgage at 96.5% LTV combined with a CalHFA MyHome deferred second — down payment covered, closing costs potentially too.
Program at a Glance
CalHFA Government pairs a standard FHA first mortgage with a CalHFA MyHome deferred second for down payment assistance. The FHA first funds at 96.5% LTV and MyHome covers the 3.5% FHA down payment — 100% of the purchase price financed. Designed for California first-time buyers with FICO 640–679 who don't qualify for CalHFA Conventional, or whose purchase price exceeds the conforming loan limit. Income limits, FTHB status, and homebuyer education requirements all apply.
CalHFA Government is a two-loan structure. The FHA first mortgage funds the purchase at 96.5% LTV. The MyHome second covers the 3.5% FHA down payment requirement. Together they reach 100% of the purchase price - the borrower may need minimal out-of-pocket cash for closing costs, which can be further reduced by layering the CalHFA ZIP program.
Loan Structure - $500,000 Purchase Example FHA 1st Mortgage (96.5% LTV) $482,500 · Standard FHA first mortgage · Full FHA qualification · MIP applies 3% MyHome 2nd · Up to $15,000 · Deferred · Covers FHA 3.5% down payment · No monthly payment Combined CLTV (up to 105% with ZIP) 100% of purchase - borrower may close with $0 down FHA MIP still applies. Because the first mortgage is an FHA loan, both the upfront MIP (1.75%, typically financed) and annual MIP apply. The CalHFA MyHome second covers the down payment but does not eliminate or reduce FHA mortgage insurance premiums. Factor MIP into the monthly payment and DTI calculation.
On CalHFA Government loans, the MyHome Assistance Program provides up to 3% of the appraised value or purchase price - whichever is less - as a deferred second mortgage for down payment and closing cost assistance.
Assistance Amount Up to 3% of the lesser of purchase price or appraised value Use of Funds Down payment and/or closing costs - covers FHA 3.5% down payment requirement Repayment Deferred - due upon sale, transfer, refinance, or payoff of first mortgage Monthly Payment No monthly payment - but imputed payment must be included in DTI calculation ZIP Layering CalHFA ZIP (zero-interest deferred) may be added for closing costs within 105% CLTV Interest Rate Simple interest accrues - rate set by CalHFA, check current CalHFA rate sheets DTI includes the MyHome payment. Even though there's no monthly payment on the second, the imputed monthly payment must be calculated and included in the DTI. Use the CalHFA second mortgage rate from the current rate sheet to calculate the imputed payment. Failing to include this in DTI is a common submission error.
Key parameters from the BFF CalHFA Government FHA Matrix. Download the PDF for complete guidelines before pricing any CalHFA Government FHA scenario.
| Parameter | Requirement |
|---|---|
| Geography | California properties only |
| Min FICO | 640 (all borrowers on the loan) |
| Max LTV (FHA 1st) | 96.5% - standard FHA maximum for 580+ FICO |
| Max CLTV | 105% - includes MyHome and any CalHFA ZIP |
| Max Loan Amount | $970,800 (subject to FHA county loan limits - may be lower in some counties) |
| Max DTI | 50% per CalHFA and FHA guidelines |
| First-Time Homebuyer | Required - no primary residence ownership in past 3 years |
| Income Limits | CalHFA income limits apply - vary by county and household size - verify at calhfa.ca.gov |
| Homebuyer Education | Required - completion certificate from CalHFA-approved provider required before closing |
| MyHome Second | Up to 3% of lesser of purchase price or appraised value · Deferred · No monthly payment · Include imputed payment in DTI |
| ZIP Third (if layered) | CalHFA zero-interest deferred for closing costs only · Combined CLTV must stay ≤105% |
| Mortgage Insurance | FHA MIP applies - upfront 1.75% (typically financed) + annual MIP per FHA schedule |
| Property Types | SFR · PUD · FHA-approved condos · Manufactured homes (FHA eligible) |
| Occupancy | Primary residence only |
| AUS | FHA TOTAL Scorecard - Approve/Eligible required |
| Non-Perm Resident Aliens | Subject to FHA eligibility rules - case # before May 25, 2025 eligible; on/after ineligible |
| Required | Homebuyer education from CalHFA-approved provider must be completed before loan closes. Completion certificate required in file. |
| Income Limits | CalHFA income limits change regularly. Always verify current limits at calhfa.ca.gov before starting the application. |
Both CalHFA programs share the same MyHome second structure, FTHB requirement, income limits, and California geography restriction. The first mortgage underneath is what differs - and that drives the FICO floor, max loan, LTV, and MIP structure.
| CalHFA Government (FHA) | CalHFA Conventional | |
|---|---|---|
| First Mortgage Type | FHA (HUD-insured) | Fannie Mae HFA Preferred |
| Min FICO | 640 | 680 |
| Max LTV (1st) | 96.5% (FHA standard) | 97% |
| Max CLTV | 105% | 105% |
| Max Loan Amount | $970,800 | Conforming county limit |
| Mortgage Insurance | FHA MIP (upfront + annual) | PMI (cancelable at 80% LTV) |
| Max DTI | 50% | 45% (680-699) / 50% (700+) |
| MyHome DPA | Up to 3% of appraised value | Up to 3.5% of appraised value |
| FTHB Required | Yes | Yes |
| Income Limits | Yes (CalHFA limits) | Yes (CalHFA limits) |
| Homebuyer Education | Required | Required |
| Geography | California only | California only |
The primary use case — borrowers who fall short of the 680 FICO floor on CalHFA Conventional but qualify for FHA. The lower FICO floor opens CalHFA to a much wider slice of the California market.
With a max loan amount of $970,800, CalHFA Government serves buyers in California's high-cost counties where conforming limits are insufficient.
FHA's more lenient credit and DTI guidelines can help borrowers who would struggle under DU conventional findings — particularly borrowers with thin credit files or recent credit events.
When MyHome covers the down payment, CalHFA ZIP can be added for additional closing cost assistance — allowing the borrower to close with minimal or zero out of pocket cash.
CalHFA Government uses an FHA first mortgage while CalHFA Conventional uses a Fannie Mae HFA Preferred first mortgage. Government has a lower minimum FICO (640 vs 680), a higher maximum loan ($970,800 vs conforming), and uses FHA at 96.5% LTV + MyHome to reach 100% financing. Both programs use the MyHome deferred second for DPA. Use Government when FICO is 640–679 or when the purchase price exceeds the conforming limit.
Up to 3% of the lesser of the appraised value or purchase price, as a deferred silent second mortgage for down payment and closing cost assistance. No monthly payment is required, but the imputed monthly payment must be included in DTI. Repayment is triggered when the first mortgage is paid off, the property is sold or transferred, or the first is refinanced.
$970,800 — higher than the standard FHA conforming limit. This allows the program to serve California's high-cost markets. The maximum may be further limited by the FHA county loan limit for the subject property's county — always verify the specific county limit before pricing.
No. CalHFA programs are California only. The subject property must be located in California. For FHA DPA in other states, see the BFF DPA Program which is available in most other states.
Yes. The CalHFA Zero Interest Program (ZIP) may be layered with MyHome for additional closing cost assistance on Government loans, provided the combined CLTV does not exceed 105%. ZIP is a zero-interest, deferred second or third mortgage for closing costs only — it cannot be used for the down payment.
CalHFA FHA Loan Programs Matrix (03/27/23)
Because the first is an FHA loan, both upfront MIP (1.75%, typically financed) and annual MIP apply. MyHome covers the down payment but does not eliminate MIP. Factor MIP into the monthly payment and DTI.
Even though there is no monthly payment on the MyHome second, the imputed monthly payment must be calculated and included in DTI. Failing to include this is a common submission error.
Price it in the Quick Pricer, download the matrix, or call your AE. We Deliver.
