Forgivable Equity Builder Loan

Program Eligibility

Review the guidelines below for both Borrower and Property Requirements to determine if you may be eligible to apply for the Forgivable Equity Builder Loan. You should also talk to one of our Preferred Loan Officers for full details.

Borrower Requirements

• Be a first-time homebuyer. See the definition of a first-time homebuyer.
• Occupy the property as a primary residence; non-occupant co-borrowers are not allowed.
• CalHFA borrowers must complete homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.
• Meet county income limits set by Fannie Mae
  • Please see CalHFA’s Income Limits for Forgivable Equity Builder Loan - Income limits are determined by Fannie Mae and are subject to change without notice. This document is only a guide, and you should contact a Preferred Loan Officer for more information.
• Contact one of our Preferred Loan Officers for more details.

Property Requirements

• Be a single-family, one-unit residence, including approved condominium/PUDs
  • Guest houses, granny units and in-law quarters may be eligible
• Manufactured housing is permitted
• Condominiums must meet the guidelines of the first mortgage

Potential Tax Consequences

• CalHFA loan servicing will issue a 1099 to borrowers on an annual basis when the loan is partially forgiven. Borrowers should seek the advice of their tax advisor.

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Interest Rate

What is the interest rate?
The Forgivable Equity Builder Loan has an interest rate of zero percent, although you may have to pay back a portion of the loan if you occupy the home for less than five years.  Interest rates on the CalHFA first mortgage will vary depending on your financial circumstances, lender fees, and other factors. Interest rates can also change daily. We recommend that you check with a Preferred Loan Officer to receive an accurate rate quote for this program.

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Homebuyer Education Requirement

CalHFA firmly believes that homebuyer education and counseling is critical to the success and happiness of a homeowner, and requires homebuyer education and counseling for first-time homebuyers using a CalHFA program.

Who has to take this Homebuyer Education and Counseling course?

Only one occupying first-time borrower on each loan transaction.

How do I take this education and counseling course?

• ONLINE: eHome's eight-hour Homebuyer Education and Counseling course is the only online course accepted by CalHFA. (fee: $99) Other online courses like Frameworks and HomeView are not acceptable because they do not provide a one-hour, 1-on-1 counseling follow-up session.
• IN-PERSON or VIRTUAL: Live Homebuyer Education and Counseling in-person or virtually though NeighborWorks America or any HUD-Approved Housing Counseling Agency
  (fee: varies by agency)

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How To Apply

How do I apply for this loan program?
Since CalHFA is not a direct lender, our mortgage products are offered through private loan officers who have been approved & trained by our Agency. These loan officers can help you find out more about CalHFA’s programs and guide you through the home buying process.

Visit the Find a Loan Officer tab, to contact a loan officer in your area.

What documents should I have ready when contacting a loan officer?
When initially contacting a loan officer, you may want to have this list of documents and information available to help answer questions that they will ask you:

• Pay stubs
• Bank statements
• Employment history
• Previous tax returns

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