Forgivable Equity Builder Loan
Forgivable Equity Builder Loan
Home equity has proven to be one of the strongest ways for families to build and pass on intergenerational wealth and CalHFA is committed to improving equitable access to homeownership for all Californians. The Forgivable Equity Builder Loan gives first-time homebuyers a head start on this with immediate equity in their homes via a loan of up to 10% of the purchase price of the home. The loan is forgivable if the borrower continuously occupies the home as their primary residence for five years
The Forgivable Equity Builder Loan is a forgivable subordinate loan program that may only be used with a CalHFA first mortgage.
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.
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
Zoom into the area where you want to purchase.
Click on that area, and use the "80% Area Median Income (LI)" as your income limit.
Contact one of our Preferred Loan Officers for more details.
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.
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
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 are not acceptable because they do not provide a one-hour, 1-on-1 counseling follow-up session.
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:
Previous tax returns
- Sean Templeton
- Travis Mortimeyer
- Jamie and Keith Ganly
- Michaela Robertson
- Lisa Dwelly
- Jennifer & Jacob Callens
- Mike and Desiree
- Erin Pick
- Terry Kirkham
- Cari Chadwick
- Denny & Yoko
- Mila Tschursin
- Thomas & Gidget Maggiano
- Sharon and Gilbert
- Victoria Coker
- Howard Bromberg
- YEHUDA SABAG