A Complete Guide to the CalPERS Home Loan Benefit


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The California Public Employees Retirement System offers a special home purchase loan benefit to it's members.

This presentation outlines the benefits and details of this special benefit that features a down payment assistance program that allows up to 102% total financing.

The CalPERS loan can also be used with the CalHFA CHDAP closing cost and down payment assistance program.

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A Complete Guide to the CalPERS Home Loan Benefit

  1. 1. UPDATED – Home Loan Options for CalPERS Members <ul><li>Thank you for attending </li></ul><ul><li>We will begin in a moment </li></ul><ul><li>Class Scheduled to begin at 6:00pm </li></ul><ul><li>Scott Schang </li></ul><ul><li>Branch Manager – Katella </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Broadview Mortgage Corporation </li></ul><ul><li>1-866-667-6724 </li></ul>
  2. 2. CalPERS Home Loan Options <ul><li>The Purpose and Goals of this Class </li></ul><ul><li>Purpose: To Create and Empower Home Owners </li></ul><ul><li>Goal: Educate you about the Specialty Home Financing Benefits available to CalPERS Members </li></ul><ul><li>Goal: Provide homebuyers with the tools and resources necessary to understand all of the options available to you </li></ul><ul><li>Goal: Update you on recent changes, challenges and opportunities with the CalPERS loan programs </li></ul>
  3. 3. CalPERS Home Loan Options <ul><li>Topics We Will Cover In This Class </li></ul><ul><li>Eligibility Guidelines for CalPERS Loans </li></ul><ul><li>Available CalPERS Home Loan Options </li></ul><ul><li>CalPERS Down Payment Assistance Program </li></ul><ul><ul><li>100% Financing Option </li></ul></ul><ul><li>CalHFA – CHDAP Closing Cost and Down Payment Assistance Options </li></ul><ul><li>Changes and Challenges with CalPERS loans </li></ul><ul><li>Wrap Up and Take Aways </li></ul>
  4. 4. CalPERS Home Loan Options <ul><li>Ask Questions during presentation </li></ul><ul><li>You may type questions in at any time during the presentation – Questions box on your screen </li></ul><ul><li>Homeownership experts are standing by to answer your questions during the presentation </li></ul><ul><li>This is an interactive learning environment. You will get the most value by having your specific questions answered </li></ul><ul><li>The only dumb question is the one you don’t ask </li></ul><ul><li>Write number down now in case you get disconnected </li></ul><ul><ul><li>1-866-667-6724 </li></ul></ul>
  5. 5. CalPERS Home Loan Options <ul><li>How CalPERS benefits from Program </li></ul><ul><li>CalPERS pension fund invests in mortgage notes as mortgage backed securities </li></ul><ul><ul><li>CalPERS is not a lender </li></ul></ul><ul><li>Payments go back into CalPERS, pension fund </li></ul><ul><li>Contributes to the growth and stability of your retirement system as a member of CalPERS </li></ul>
  6. 6. CalPERS Home Loan Options <ul><li>Who is Eligible </li></ul><ul><li>Active or inactive Member of the California Public Employees’ Retirement System – “CalPERS” </li></ul><ul><li>Active or inactive Member of the Legislators’ Retirement System – “LRS” </li></ul><ul><li>Active or inactive Member of the Judges’ Retirement System – “JRS” </li></ul><ul><li>Retired and Annuitant Members are also Eligible </li></ul>
  7. 7. CalPERS Home Loan Options <ul><li>Available Loan Programs </li></ul><ul><li>CalPERS offers Conventional & FHA Loan Options </li></ul><ul><ul><li>FHA allows 1-4 unit properties </li></ul></ul><ul><li>Conventional loan programs are subject to PMI </li></ul><ul><ul><li>Maximum 90% LTV & 41% DTI </li></ul></ul><ul><ul><li>Debt to Income (DTI) ratios limited to 45% on Dec. 12 th </li></ul></ul><ul><li>Underwriting guidelines follow standard guidelines </li></ul><ul><li>CalPERS sets interest rates and fees </li></ul><ul><ul><li>Rates set and published daily by CalPERS </li></ul></ul><ul><ul><li>Origination fees limited </li></ul></ul><ul><ul><li>No rebate or yield spread to lenders allowed </li></ul></ul><ul><ul><li>Maximum lender fees - $350.00 </li></ul></ul><ul><li>CalPERS - Down Payment Assistance Program </li></ul>
  8. 8. CalPERS Home Loan Options <ul><li>Property Qualifications </li></ul><ul><li>Eligible Properties </li></ul><ul><ul><li>Single Family Residence – Detached </li></ul></ul><ul><ul><li>2-4 Unit Properties Attached </li></ul></ul><ul><ul><ul><li>Conforming FHA Only </li></ul></ul></ul><ul><ul><ul><li>Up to $417,000 loan amount </li></ul></ul></ul><ul><ul><ul><li>Cannot use down payment assistance </li></ul></ul></ul><ul><ul><li>Condominiums / Townhomes – Attached </li></ul></ul><ul><li>Must intend on occupying property as primary residence – No investment or second homes </li></ul><ul><li>Home can be located in any State </li></ul><ul><ul><ul><li>You must move into home within 45 days of note date – documents drawn </li></ul></ul></ul>
  9. 9. CalPERS Home Loan Options <ul><li>FHA Fixed Rate – Low to No Down </li></ul><ul><li>FHA Loans are Government insured - MIP </li></ul><ul><ul><li>Up to 96.5% Loan to Value </li></ul></ul><ul><ul><ul><li>3.5% minimum down payment </li></ul></ul></ul><ul><li>Can be used in conjunction with a CalPERS personal loan to pay down payment </li></ul><ul><ul><li>Must meet requirements for personal loan </li></ul></ul><ul><li>Credit and Qualifying guidelines are much more flexible than conventional </li></ul><ul><li>Can use non-occupying co-mortgagers to qualify </li></ul>
  10. 10. CalPERS Home Loan Options <ul><li>FHA Fixed Rate – Low to No Down </li></ul><ul><li>FHA Loans require 2 types of Mortgage Insurance Premiums - MIP </li></ul><ul><li>Upfront Mortgage Insurance Premium </li></ul><ul><ul><li>1.75% of Loan Amount </li></ul></ul><ul><ul><li>Can be financed into loan amount </li></ul></ul><ul><li>Monthly Mortgage Insurance Premium </li></ul><ul><ul><li>.55% of Loan Amount </li></ul></ul><ul><ul><li>Included in monthly payment </li></ul></ul><ul><ul><li>Included on mortgage statement </li></ul></ul>
  11. 11. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>CalPERS Personal Loan Guidelines </li></ul><ul><li>Personal Loan is available to take out for the purposes of contributing to the down payment required to purchase a home </li></ul><ul><li>CalPERS Personal Loan is secured by Member’s retirement account with a pledge agreement. </li></ul><ul><li>Funds are not withdrawn from the Member’s account, but used as collateral for the CalPERS Personal Loan </li></ul><ul><li>Loan is treated as a liability and payment included in debt to income ratio </li></ul><ul><li>No lien is placed against the property </li></ul>
  12. 12. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>CalPERS Personal Loan Guidelines </li></ul><ul><li>Eligible Borrowers </li></ul><ul><ul><li>Active or inactive members of CalPERS, LRS and JRS </li></ul></ul><ul><ul><li>Retired and annuitant members, and Tier Two Member whose contributions are service credits are not eligible for the Personal Loan </li></ul></ul>
  13. 13. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>CalPERS Personal Loan Guidelines </li></ul><ul><li>Eligible Properties </li></ul><ul><ul><li>Single family residence - Detached </li></ul></ul><ul><ul><li>Condominiums - Attached </li></ul></ul><ul><ul><li>Planned Urban Development - PUD </li></ul></ul><ul><li>Must be occupied as principle residence </li></ul><ul><li>No multi family properties - 2 to 4 units not eligible </li></ul>
  14. 14. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>CalPERS Personal Loan Guidelines </li></ul><ul><li>Loan Type </li></ul><ul><ul><li>Personal loan is fixed rate, fully amortized </li></ul></ul><ul><li>Loan Term </li></ul><ul><ul><li>Loan term is determined by loan amount </li></ul></ul><ul><ul><ul><li>$ 1,000 - $1,499 3 Years </li></ul></ul></ul><ul><ul><ul><li>$1,500 - $2,999 4 Years </li></ul></ul></ul><ul><ul><ul><li>$3,000 - $4,999 5 Years </li></ul></ul></ul><ul><ul><ul><li>$5,000 - $9,999 10 Years </li></ul></ul></ul><ul><ul><ul><li>$10,000 - $18,421 15 Years </li></ul></ul></ul><ul><li>Minimum loan is $1,000 – Minimum term is 1 year </li></ul>
  15. 15. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>CalPERS Personal Loan Guidelines </li></ul><ul><li>Maximum Loan Amount </li></ul><ul><ul><li>Up to 5% of the value of the home or </li></ul></ul><ul><ul><li>Up to 50% of each Member’s current contribution to retirement account </li></ul></ul><ul><ul><li>Maximum Personal Loan amount is $18,421 </li></ul></ul><ul><li>Members may obtain their current contribution amount, available for use on a CalPERS Personal Loan by contacting CalPERS at 888-225-7377 </li></ul><ul><li>First loan amount can not exceed $350,000 </li></ul>
  16. 16. CalPERS Home Loan Options <ul><li>California Homebuyer’s Downpayment Assistance Program - CHDAP </li></ul><ul><li>Maximum loan amount – 3% of purchase price </li></ul><ul><li>Fixed interest rate for the entire loan term </li></ul><ul><ul><li>Rates set and published by CalHFA </li></ul></ul><ul><ul><li>Rates do not “float” like typical loan programs </li></ul></ul><ul><ul><li>See “tools & resources” on site for link to rate sheet </li></ul></ul><ul><li>Term of CHDAP Loan </li></ul><ul><ul><li>Term matches the term of the first mortgage </li></ul></ul><ul><ul><li>Payments on the junior loan are deferred for the life of the first loan </li></ul></ul><ul><li>Minimum Borrower Contribution </li></ul><ul><ul><li>Minimum 3% of the sales price required from the borrower(s) own funds </li></ul></ul>
  17. 17. CalPERS Home Loan Options <ul><li>California Homebuyer’s Downpayment Assistance Program - CHDAP </li></ul><ul><li>Repayment of CHDAP </li></ul><ul><ul><li>Transfer of title </li></ul></ul><ul><ul><li>Sale of the residence </li></ul></ul><ul><ul><li>Payoff or refinance of the first loan </li></ul></ul><ul><ul><li>Upon the formal filing and recording of a Notice of Default (unless rescinded) </li></ul></ul><ul><li>Program Limitations </li></ul><ul><ul><li>Income limits - Determined by county & household </li></ul></ul><ul><ul><li>First time homebuyer – Cannot have owned in past 3 years </li></ul></ul><ul><ul><li>Sales price – Determined by county </li></ul></ul><ul><li>Program Restrictions </li></ul><ul><ul><li>First lien holder must allow for community seconds </li></ul></ul>
  18. 18. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>Using CHDAP with CalPERS </li></ul><ul><ul><li>CalPERS Personal Loan meets borrower minimum contribution requirements </li></ul></ul><ul><ul><li>CHDAP can be used for down payment assistance or closing costs </li></ul></ul><ul><ul><li>CalPERS FHA 1 st Mortgage + Down Payment Assistance + CHDAP = Max 102% CLTV Loan </li></ul></ul>
  19. 19. CalPERS Home Loan Options <ul><li>Down Payment Assistance Program </li></ul><ul><li>Using CHDAP with CalPERS </li></ul><ul><li>Opportunities with CalPERS Loan Programs </li></ul><ul><ul><li>CHDAP may be used with non-CalHFA first mortgages if first lender is approved with CalHFA </li></ul></ul><ul><ul><li>CHDAP may be used in tandem with CalPERS FHA and CalPERS personal loan (borrower’s own funds) </li></ul></ul><ul><li>Possible Uses for CHDAP with CalPERS </li></ul><ul><ul><li>Additional down payment beyond the 3% required by CalHFA </li></ul></ul><ul><ul><li>Pay upfront Mortgage Insurance Premium – 1.75% </li></ul></ul><ul><ul><ul><li>Reduces monthly payment </li></ul></ul></ul><ul><ul><ul><li>Saves thousands in interest by not financing MIP </li></ul></ul></ul><ul><ul><li>Cover closing costs – title, escrow, taxes, insurance, points </li></ul></ul>
  20. 20. CalPERS Home Loan Options <ul><li>Changes and Challenges </li></ul><ul><li>Interest Rate Float Down Eliminated </li></ul><ul><ul><li>Removes opportunity to reduce rate if drop occurs during escrow </li></ul></ul><ul><ul><li>Benefit of using CalPERS is only lender fee </li></ul></ul><ul><li>Opportunity: Standard FHA may be better pricing </li></ul><ul><ul><li>As of today – CalPERS pricing is better! </li></ul></ul><ul><ul><li>Broadview Mortgage will honor $350 lender fee </li></ul></ul><ul><ul><ul><li>Other lenders may not </li></ul></ul></ul>
  21. 21. CalPERS Home Loan Options <ul><li>Changes to FHA Condo loans </li></ul><ul><li>On November 2 nd , 2009 – FHA to adopt stricter guidelines for Condo’s to match Fannie Mae </li></ul><ul><ul><li>Must be 50% owner occupied </li></ul></ul><ul><ul><li>Cannot have unresolved litigation </li></ul></ul><ul><ul><li>More than 15% HOA delinquency not eligible </li></ul></ul><ul><li>Condos using FHA financing could be “Approved” on a case by case basis – Spot Approval </li></ul><ul><ul><li>No longer available starting November 2 nd </li></ul></ul><ul><li>New construction condominium project guidelines more strict as well </li></ul>
  22. 22. CalPERS Home Loan Options <ul><li>CalPERS Home Loan Review </li></ul><ul><li>Conventional conforming and non-conforming loans require minimum 10% down payment </li></ul><ul><ul><li>Can use Personal Loan up to 5% if eligible </li></ul></ul><ul><ul><li>FNMA Guidelines more restrictive Dec. 12 th – 45% DTI max </li></ul></ul><ul><li>Interest Rate Float Down eliminated </li></ul><ul><ul><li>Standard FHA may offer more aggressive pricing </li></ul></ul><ul><li>FHA fixed rate first mortgage with Personal Loan provides no down payment option </li></ul><ul><li>Lender closing costs are limited by CalPERS to $350 </li></ul><ul><li>If you work in a Public School or Community College May be eligible for CalSTRS 80/17 </li></ul><ul><ul><li>3% down payment required – No MIP </li></ul></ul>
  23. 23. CalPERS Home Loan Options <ul><li>Wrap up and Take Aways </li></ul><ul><ul><li>We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs </li></ul></ul><ul><ul><li>We are CalPERS experts and would like an opportunity to speak with you about your options </li></ul></ul><ul><ul><li>We are more than happy to be your “second opinion” if you are already working with someone </li></ul></ul><ul><ul><li>We are more than happy to recommend you to a qualified Real Estate Agent that shares our values and passion for education </li></ul></ul>
  24. 24. CalPERS Home Loan Options <ul><li>Wrap up and Take Aways </li></ul><ul><li>You will receive a “Thank you” email with links to the information we’ve talked about here today including </li></ul><ul><ul><li>Copy of Workbook & Notes PDF </li></ul></ul><ul><ul><li>Links to the topics we discuss in class </li></ul></ul><ul><ul><ul><li>CalPERS Interest rates </li></ul></ul></ul><ul><ul><ul><li>FHA Loan Limits </li></ul></ul></ul><ul><ul><ul><li>FHA Approved lender search </li></ul></ul></ul><ul><ul><ul><li>CalHFA CHDAP program guidelines </li></ul></ul></ul><ul><ul><ul><li>CalHFA Interest rates </li></ul></ul></ul>
  25. 25. Thank You for Attending If you enjoyed this class – Tell a friend  <ul><li>Please tell us how we’re doing </li></ul><ul><li>Follow up email includes a link to “Praise” page </li></ul><ul><li>Your feedback is greatly appreciated </li></ul><ul><li>For more information </li></ul><ul><li>1-866-667-6724 </li></ul><ul><li>Homeownership Educator </li></ul><ul><li>Scott Schang </li></ul><ul><li>Branch Manager </li></ul><ul><li>Broadview Mortgage Corporation </li></ul>