CalPERS FHA
May 22, 2009

CalPERS FHA Loan
With most of the loans closing these days as FHA I wanted to go over some of the basic features of the CalPERS FHA home loan program. FHA is short for Federal Housing Administration which is part of HUD or Housing and Urban Development. FHA is a USA government agency that was created as part of the National Housing Act of 1934 with goals to improve housing standards, conditions, and to provide adequate home financing system through insurance of mortgage loans. The FHA home loan program is literally helping millions of home buyers get into homes with affordable rates and great terms. Let’s take a look at some of the features:

• only 3.5% minimum down payment required ( can be a gift)
• credit score can be as low as 580 (620 for most lenders)
• reserves not required
• can be currently in a chapter 13 bankruptcy (one year with good payment history)
• flexible underwriting
• 30 year fully amortized loans
• no prepayment penalties
• lowest rates in years

The CalPERS Home Loan Program also has an FHA loan product. You will get all the features of FHA loans with CalPERS overlays. With the CalPERS FHA overlays you get the following features:

• 30 -60 -90 day rate protection (rate lock)
• two chances to get a lower rate during the loan process ( 60 & 90 only)
• reduced lender processing fees
• reduced title and escrow fees
• limited closing costs
• closing cost assistance (premium pricing)
• down payment assistance (with the PRASL personal loan)

What about the closing costs for CalPERS FHA loans?
In today’s market it is easy to get the seller to pay for your closing costs. All you have to do is ask. Well have your agent ask. You just write into the offer to purchase that the seller is to credit 1-6% of the purchase price to the buyer for closing costs. When the seller agrees, you will have that money in the escrow account. Let’s say you have to bring in 10,000.00 to complete the purchase and “close escrow”. If the seller has agreed to pay 6,000.00 in closing costs then you would only have to bring in 4,000.00 to complete the purchase. (10,000 – 6,000 = 4,000).

No money down and No closing costs
As a CalPERS Member you can still structure a purchase transaction with little to nothing out of pocket. Here is how you can structure this type of loan transaction:

1. 96.5% FHA CalPERS 1st Mortgage Loan
2. 3.5% Personal loan from CalPERS (PRASL)
3. Seller to pay up to 6% for buyers closing costs

With this structure you will have the down payment covered from your personal loan and your closing costs covered from the seller concessions.
In my opinion there is no better time than today to purchase your home. You can get a great rate and even structure the deal with no money out of pocket. How can you beat that?

Sean Safholm
CalPERS FHA Direct Lender
1.888.415.2000

CalPERS – Sacramento California

2 comments

2 Responses to “CalPERS FHA”

  1. CalPERS Home Loan Mortgage Financing Says:
    May 4th, 2010 at 1:27 am

    [...] Jump to Comments CalPERS FHA Loans can accomplish 100% financing http://calstatelender.com/calpers-fha-loans-100-percent-financing-with-vitek-mortgage/ [...]

  2. CalPERS Home Loan Mortgage Financing Says:
    May 4th, 2010 at 1:28 am

    [...] Jump to Comments CalPERS FHA Loans http://calstatelender.com/calpers-fha-loans-100-percent-financing-with-vitek-mortgage/ [...]