Summer 2016, Volume 27
June is Homeownership Month
This year's Homeownership Month is a big deal for CalHFA, and to celebrate, CalHFA is offering a great deal for homebuyers.
We have financed more than a billion dollars in mortgage lending this fiscal year, a mark we hit in late May. Not only is this a number we haven't seen since 2008, it also means we've helped more than 4,200 Californians buy their first home with a mortgage they can afford.
One of the most important parts of this purchase is homebuyer education; it's even more important for people to keep their homes than it is for them to buy it in the first place. That's why we require that borrowers take a comprehensive homebuyer education and financial literacy class before their loan closes.
Homeownership Month is a great time to show just how important this is, so for the month of June, we are offering free online homebuyer education through eHomeAmerica. Anyone who completes the five-hour online course by June 30, 2016 will have the usual fee waived. Remember, this course is mandatory for first-time homebuyers using a CalHFA first mortgage loan, and the certificate is good for up to a year; there's no time like the present to get educated.
These are exciting times for CalHFA, and we're looking forward to helping more Californians have place to call home. If you're looking to buy your first home, sign up now to take advantage of our month of free education!
Lending Heroes Help Hundreds of Homebuyers
CalHFA has an extensive network of lenders, loan officers and mortgage brokers who are extremely dedicated to the first-time homebuyer market. We recognize these individuals and teams on a quarterly and annual basis, so please take a moment to learn a little more about our CalHFA Lending Heroes.
Housing Plays Role in May Budget Revision
Governor Brown's May Revision to the California state budget contained many proposals, among them a way to give CalHFA more flexibility in how it delivers down payment assistance to California homebuyers.
"With changes in the law, CalHFA will be able to align resources with local governments and expand homeownership opportunities increasing the number of first-time homebuyers we can assist throughout the state, particularly in the high cost areas," said CalHFA's Executive Director Tia Boatman Patterson.
Governor Brown's budget contains a provision for combining several existing down payment assistance funds into a single fund to be administered by CalHFA. You can read about that, in addition to ideas and proposals regarding by-right development and the new No Place Like Home initiative, here.
A Special Report From Zillow
The real estate company Zillow.com teamed with Keep Your Home California in May to write a special blog post looking at the specific challenges of purchasing and keeping a home in the Golden State. Zillow looked at five major metropolitan markets and compared median home prices with median incomes. Although the results are not surprising, it's still a fascinating look at how varied the housing markets are across California.
Multifamily Gears Up to Make a Difference
CalHFA's Multifamily Division has always been dedicated to providing affordable housing to low and moderate income Californians. A severe statewide shortage in housing resulting in rising rents called for us to examine how we can better serve California's affordable multifamily development market.
First, we looked at what CalHFA's strengths are and how we can develop programs that add value to the California marketplace:
- CalHFA's sole focus is housing, with no distractions or competing interests
- CalHFA has a statewide focus, serving urban and rural, north and south, coastal and inland
- CalHFA's organization, position and mission allows us to build and sustain strong relationships with other governmental entities at the local, state, and federal levels
Second, we looked at market needs that were not always being met by other lending institutions or governmental programs:
- Small projects, or those needing less than $3.5 million in acquisition/rehab financing
- Loans outside of high CRA areas
- Below market rents for the so-called “missing middle” (households earning 60% - 80% AMI, who are rent-burdened by market-rate rents)
This analysis gave CalHFA's multifamily team helpful information to craft various programs that for developers who serve the so-called missing middle
- The Special Needs Housing Program (SNHP), which replaces and improves upon MHSA Housing Program while serving the same vulnerable population through capital loans and capitalized operating subsidies, began June 1
- Our Conduit Issuance Program provides competitive fees with a focus on local government collaboration, and is available now
- Our Permanent Loan Program and Acquisition/Rehabilitation Loan Program both provide competitive rates to preserve and increase affordable multifamily housing across the state, and are available now
- The Small Loan Program is designed, particularly with existing smaller developments in mind, for the acquisition/rehabilitation and permanent financing to preserve or increase affordability. Terms and rates on these loans will be very competitive. Loans are provided up to $3.5 million and include technical assistance.
Exclusive Partnership with HUD & US Treasury
Our new Permanent Loan and Acquisition/Rehabilitation Loan Programs truly set CalHFA apart in the market. Through an exclusive partnership between the U.S. Treasury and HUD, CalHFA and other states' Housing Finance Agencies can now provide significantly lower interest rates to preserve and increase affordable multifamily housing.
The U.S. Treasury will use the Federal Financing Bank to participate in multifamily loans insured under FHA's HFA Risk-Sharing Program. Loans are underwritten by CalHFA, and these programs are available to projects completing non-substantial and substantial rehab under FHA insurance guidelines.
The program will provide permanent financing at a fixed rate of interest, based on the 10-year Treasury rate, for a fully amortizing term of 40 years. As with all CalHFA first lien loans, all ongoing CalHFA fees and monitoring costs are included in the loan rate. For-profit, non-profit and public agencies can use this program to refinance affordable housing developments to preserve long-term affordability, complete rehabilitation, and take out equity in cash, subject to restrictions.
CalHFA is excited to have the opportunity to better serve the multifamily housing market. Our new and developing programs will help CalHFA fulfill its mission and increase our impact as a lender with a purpose.
Tips and Successes from Keep Your Home California
The Keep Your Home California program has been immensely successful in mitigating the results of the housing crisis that gripped the nation for several years. Although the worst of it seems to be behind us, there are still thousands of families who are having trouble paying their mortgages due to job loss or other circumstances.
The most important thing to know if you're having a tough time paying your own mortgage is that you need to be your own advocate and not give up. It can be a very uncomfortable process to go through, but ignoring it for that reason and/or giving up because you feel overwhelmed is not going to help solve the problem. Here are some concrete steps you can take:
- Look into assistance from a government program like KYHC or HAMP.
- Contact your mortgage servicer and/or lender to let them know you are having difficulty making your mortgage payments. Oftentimes, they can offer proprietary programs or other solutions to assist during your financial difficulties.
- Do not, under any circumstances, pay any upfront fees to someone who claims they can help you get a modification. These services are available for free from HUD approved housing counseling agencies and/or by working with your lender directly.
- Consider all options, including bankruptcy or selling your home.
KYHC recently received $383 million in additional funding to continue their work of helping homeowners stay in their homes. Take a look at some of their recent success stories, featuring real people helped by Keep Your Home California.
Additions to the CalHFA Board of Directors
CalHFA has added a few new faces to the Board of Directors in the past months, representing a wide swath of the affordable housing community.
Stephen Russell is the Executive Director of the San Diego Housing Federation, and has been an advocate for affordable housing in San Diego for more than a dozen years. Not only is he incredibly knowledgeable; he's also engaged and passionate. Welcome aboard!
Anamarie Avila Farias has over 21 years of experience in administering affordable housing programs in various communities throughout the Bay Area. Currently, she is a Council member for the City of Martinez and candidate for the Contra Costa County Board of Supervisors.
Ben Metcalf was appointed as Director of the Department of Housing and Community Development earlier in the year, and brings years of multifamily housing experience at the federal and local levels. Check out his Director's podcast from March.
Eileen Gallagher of San Francisco brings to the Board a well-cultivated expertise in finance. She is the managing director at Stifel's San Francisco Public Finance Office. Gallagher earned a Master of Business Administration degree in finance and marketing from the Northwestern University Kellogg School of Management.
Dr. Vito Imbasciani was sworn in as the Secretary at the California Department of Veterans Affairs in late 2015. Dr. Imbasciani is a true Renaissance man: more than 28 years' service as an Army surgeon through four deployments, a Master of Arts in Musicology, and fluency in six languages.
In addition to these appointments, Janet Falk and Michael Gunning have been reappointed to the Board by Governor Brown, with Ms. Falk now serving as Board Chair.
Our New Master Servicer
CalHFA is pleased to welcome Lakeview Loan Servicing as a new Master Servicer for our single family first mortgage loans. We chose Lakeview due to their belief in the power of excellent customer service and their commitment to quick turnaround times for processing our mortgage applications.
CalHFA uses a Master Servicer to take care of mortgage payments and other administrative functions once the loan has closed and homeowners have moved in. The Master Servicer sends out mortgage bills and statements, collects payments, follows up with late payers and delinquencies, and performs other vital service-oriented functions for CalHFA.
Lakeview was founded in 2010 with offices in across the country. They work closely with Bayview Asset Management, a mortgage investment firm founded in 1993 with more than $9.4 billion in assets.
We look forward to a successful partnership with Lakeview as we move into summer and beyond.
First Western HFA Summit - "Pioneering Homeownership"
Several single family lending directors from western housing finance agencies traveled to Sacramento earlier this month for the first-ever Western HFA Summit. Over the course of two days, they shared challenges and successes, while hearing from industry insiders from Fannie Mae, the California Association of Realtors, the CA Mortgage Bankers Association and others.
Much of the cost of the event was underwritten by the generous sponsorship of Fannie Mae, Genworth Mortgage Insurance and Hilltop Securities. By the end of the summit, attendees were already planning next year’s conference. Thanks to everyone who attended and set a high bar for future summits.