Faculty and Staff Home Buyer's Guide
Mortgage Programs
Many people rent until they have saved up enough money to buy, Then they begin searching For a first home. There are organizations such as Fannie Mae and Freddie Mac that can Be very helpful for first-time buyers, as well as a number of loan programs available For CSULB employees. CSU CitiMortgage Programs – This is a special mortgage program through CitiMortgage. Its primary target is to assist moderate-to low-income households. One hundred percent loans are offered at 80% loan to value rates for employees who are purchasing homes On leasehold properties with reimbursement of all application fees. Call 718-248-2485 for information. • CalPERS Home Loan Program – This program is open to all members of CalPERS. Benefits include free rate float downs, down payment loans using your CalPERS Retirement Account as collateral, and discounts/controlled costs for fees. Call 800-874-PERS (7377) for Information.
Choosing a Mortgage Company
When you are ready to shop for a loan, you can work directly with a lender or with a mortgage broker representing many individual lenders. Direct lenders are lending their own money, have in house programs and make the final decision on your application. Mortgage brokers are intermediaries that represent many lenders and loan programs from which you can choose.
Potential Benefits of Using a Mortgage Lender
Mortgage lenders not only originate their own loans, but also underwrite, approve funds, and service loans. Mortgage lenders have their own money to lend and therefore have the most control over the loan process. The mortgage lenders can provide incentives such as faster and/or easier loan approvals. Loans through a mortgage lender tend to remain with the same lender throughout the length of the loan.
Potential Benefits of Using a Mortgage Broker
Mortgage brokers originate loans but do not actually lend the money. brokers will submit packages to outside sources that underwrite and fund the loan. Mortgage brokers may offer the best opportunity to get your loan approved no matter what your credit score since they can send the loan to many different lenders. Loans through a mortgage broker sometimes are "sold" to other lenders even after the loan was initially underwritten and funded. This process does not change the terms of the loan.
Loan Program Highlights
Below is a brief explanation of some of the most commonly used loan programs.
Fixed Rate Loan - A loan with an interest rate that remains constant throughout the life of the loan.
Adjustable Rate Mortgage (ARM) - A loan with an interest rate that can change, either upward or downward, at specified periods during the life of the loan. The change in the interest rate is usually tied to a financial index over which the lender has no control.
FHA Loan - FHA loans are available as a fixed rate, ARM, or buy down. They are loans that are insured by the Federal Housing Administration and offer low down payments and lower income requirements. There is a maximum FHA loan limit which varies from region to region.
VA Loan - Fixed loans with no down-payment are available to eligible Veterans, in-service Veterans, and certain other Reservists and National Guard members. VA loans are guaranteed by the Veteran's Administration. (ARM loans are not presently available).
Community Homebuyers Program - A fixed rate loan with a low (3% to 5%) down-payment, no cash reserve requirement, and lower income requirements. These loans are subject to borrowers meeting maximum income limits and completing a course on homeownership.
Mortgage Credit Certificate (MCC) Program - A first-time homebuyers program subject to purchase price, income limits, and availability of funds. The MCC is actually a special tax credit and can be used with almost any loan program. The amount of the tax credit is used as additional income to qualify the borrower(s) (Very Limited Funds!).
CHFA California Home Finance Agency - A first time homebuyers program, sponsored by the State of California, subject to purchase price, income limits, and availability of funds. This program can be in the form of a Conventional, FHA, or VA loan. This program offers a low down-payment and lower-than-market rates on both fixed and ARM loans.