a complete guide to the calpers home loan benefit

Where homeownership education takes flight!

UPDATED – Home Loan Options for CalPERS Members

Thank you for attending

We will begin in a momentClass Scheduled to begin at 6:00pm

Scott SchangBranch Manager – Katella

Homeownership EducatorBroadview Mortgage Corporation

1-866-667-6724


CalPERS Home Loan OptionsThe Purpose and Goals of this Class

• Purpose: To Create and Empower Home Owners

• Goal: Educate you about the Specialty Home Financing Benefits available to CalPERS Members

• Goal: Provide homebuyers with the tools and resources necessary to understand all of the options available to you

• Goal: Update you on recent changes, challenges and opportunities with the CalPERS loan programs


CalPERS Home Loan OptionsTopics We Will Cover In This Class

• Eligibility Guidelines for CalPERS Loans

• Available CalPERS Home Loan Options

• CalPERS Down Payment Assistance Program– 100% Financing Option

• CalHFA – CHDAP Closing Cost and Down Payment Assistance Options

• Changes and Challenges with CalPERS loans

• Wrap Up and Take Aways


CalPERS Home Loan OptionsAsk Questions during presentation

• You may type questions in at any time during the presentation – Questions box on your screen

• Homeownership experts are standing by to answer your questions during the presentation

• This is an interactive learning environment. You will get the most value by having your specific questions answered

• The only dumb question is the one you don’t ask

Write number down now in case you get disconnected

1-866-667-6724


CalPERS Home Loan OptionsHow CalPERS benefits from Program

• CalPERS pension fund invests in mortgage notes as mortgage backed securities– CalPERS is not a lender

• Payments go back into CalPERS, pension fund

• Contributes to the growth and stability of your retirement system as a member of CalPERS


CalPERS Home Loan OptionsWho is Eligible

• Active or inactive Member of the California Public Employees’ Retirement System – “CalPERS”

• Active or inactive Member of the Legislators’ Retirement System – “LRS”

• Active or inactive Member of the Judges’ Retirement System – “JRS”

• Retired and Annuitant Members are also Eligible


CalPERS Home Loan OptionsAvailable Loan Programs

• CalPERS offers Conventional & FHA Loan Options– FHA allows 1-4 unit properties

• Conventional loan programs are subject to PMI– Maximum 90% LTV & 41% DTI– Debt to Income (DTI) ratios limited to 45% on Dec. 12th

• Underwriting guidelines follow standard guidelines

• CalPERS sets interest rates and fees– Rates set and published daily by CalPERS– Origination fees limited– No rebate or yield spread to lenders allowed

– Maximum lender fees - $350.00

• CalPERS - Down Payment Assistance Program


CalPERS Home Loan OptionsProperty Qualifications

• Eligible Properties – Single Family Residence – Detached– 2-4 Unit Properties Attached

• Conforming FHA Only• Up to $417,000 loan amount• Cannot use down payment assistance

– Condominiums / Townhomes – Attached

• Must intend on occupying property as primary residence – No investment or second homes

• Home can be located in any State• You must move into home within 45 days of note date –

documents drawn


CalPERS Home Loan OptionsFHA Fixed Rate – Low to No Down

• FHA Loans are Government insured - MIP– Up to 96.5% Loan to Value

• 3.5% minimum down payment

• Can be used in conjunction with a CalPERS personal loan to pay down payment– Must meet requirements for personal loan

• Credit and Qualifying guidelines are much more flexible than conventional

• Can use non-occupying co-mortgagers to qualify


CalPERS Home Loan OptionsFHA Fixed Rate – Low to No Down

• FHA Loans require 2 types of Mortgage Insurance Premiums - MIP

• Upfront Mortgage Insurance Premium– 1.75% of Loan Amount– Can be financed into loan amount

• Monthly Mortgage Insurance Premium– .55% of Loan Amount– Included in monthly payment– Included on mortgage statement


CalPERS Home Loan OptionsDown Payment Assistance Program

• CalPERS Personal Loan Guidelines

• Personal Loan is available to take out for the purposes of contributing to the down payment required to purchase a home

• CalPERS Personal Loan is secured by Member’s retirement account with a pledge agreement.

• Funds are not withdrawn from the Member’s account, but used as collateral for the CalPERS Personal Loan

• Loan is treated as a liability and payment included in debt to income ratio

• No lien is placed against the property




• Eligible Borrowers– Active or inactive members of CalPERS, LRS and

JRS– Retired and annuitant members, and Tier Two

Member whose contributions are service credits are not eligible for the Personal Loan




• Eligible Properties– Single family residence - Detached– Condominiums - Attached– Planned Urban Development - PUD

• Must be occupied as principle residence

• No multi family properties - 2 to 4 units not eligible



• CalPERS Personal Loan Guidelines• Loan Type

– Personal loan is fixed rate, fully amortized

• Loan Term– Loan term is determined by loan amount

• $1,000 - $1,4993 Years• $1,500 - $2,999 4 Years• $3,000 - $4,999 5 Years• $5,000 - $9,999 10 Years• $10,000 - $18,421 15 Years

• Minimum loan is $1,000 – Minimum term is 1 year




• Maximum Loan Amount– Up to 5% of the value of the home or– Up to 50% of each Member’s current contribution to

retirement account– Maximum Personal Loan amount is $18,421

• Members may obtain their current contribution amount, available for use on a CalPERS Personal Loan by contacting CalPERS at 888-225-7377

• First loan amount can not exceed $350,000


CalPERS Home Loan OptionsCalifornia Homebuyer’s Downpayment

Assistance Program - CHDAP• Maximum loan amount – 3% of purchase price

• Fixed interest rate for the entire loan term– Rates set and published by CalHFA– Rates do not “float” like typical loan programs– See “tools & resources” on site for link to rate sheet

• Term of CHDAP Loan– Term matches the term of the first mortgage– Payments on the junior loan are deferred for the life of the

first loan

• Minimum Borrower Contribution– Minimum 3% of the sales price required from the

borrower(s) own funds


CalPERS Home Loan OptionsCalifornia Homebuyer’s Downpayment

Assistance Program - CHDAP• Repayment of CHDAP

– Transfer of title – Sale of the residence – Payoff or refinance of the first loan – Upon the formal filing and recording of a Notice of Default

(unless rescinded)

• Program Limitations– Income limits - Determined by county & household– First time homebuyer – Cannot have owned in past 3 years– Sales price – Determined by county

• Program Restrictions– First lien holder must allow for community seconds



Using CHDAP with CalPERS

– CalPERS Personal Loan meets borrower minimum contribution requirements

– CHDAP can be used for down payment assistance or closing costs

– CalPERS FHA 1st Mortgage + Down Payment Assistance + CHDAP = Max 102% CLTV Loan



Using CHDAP with CalPERS• Opportunities with CalPERS Loan Programs

– CHDAP may be used with non-CalHFA first mortgages if first lender is approved with CalHFA

– CHDAP may be used in tandem with CalPERS FHA and CalPERS personal loan (borrower’s own funds)

• Possible Uses for CHDAP with CalPERS– Additional down payment beyond the 3% required by

CalHFA– Pay upfront Mortgage Insurance Premium – 1.75%

• Reduces monthly payment• Saves thousands in interest by not financing MIP

– Cover closing costs – title, escrow, taxes, insurance, points


CalPERS Home Loan OptionsChanges and Challenges

• Interest Rate Float Down Eliminated– Removes opportunity to reduce rate if drop

occurs during escrow– Benefit of using CalPERS is only lender fee

• Opportunity: Standard FHA may be better pricing– As of today – CalPERS pricing is better!– Broadview Mortgage will honor $350 lender fee

• Other lenders may not


CalPERS Home Loan OptionsChanges to FHA Condo loans

• On November 2nd, 2009 – FHA to adopt stricter guidelines for Condo’s to match Fannie Mae– Must be 50% owner occupied– Cannot have unresolved litigation– More than 15% HOA delinquency not eligible

• Condos using FHA financing could be “Approved” on a case by case basis – Spot Approval– No longer available starting November 2nd

• New construction condominium project guidelines more strict as well


CalPERS Home Loan OptionsCalPERS Home Loan Review

• Conventional conforming and non-conforming loans require minimum 10% down payment– Can use Personal Loan up to 5% if eligible– FNMA Guidelines more restrictive Dec. 12th – 45% DTI max

• Interest Rate Float Down eliminated – Standard FHA may offer more aggressive pricing

• FHA fixed rate first mortgage with Personal Loan provides no down payment option

• Lender closing costs are limited by CalPERS to $350

• If you work in a Public School or Community College May be eligible for CalSTRS 80/17– 3% down payment required – No MIP


CalPERS Home Loan OptionsWrap up and Take Aways

– We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs

– We are CalPERS experts and would like an opportunity to speak with you about your options

– We are more than happy to be your “second opinion” if you are already working with someone

– We are more than happy to recommend you to a qualified Real Estate Agent that shares our values and passion for education


CalPERS Home Loan OptionsWrap up and Take Aways

• You will receive a “Thank you” email with links to the information we’ve talked about here today including

– Copy of Workbook & Notes PDF– Links to the topics we discuss in class

• CalPERS Interest rates• FHA Loan Limits• FHA Approved lender search• CalHFA CHDAP program guidelines• CalHFA Interest rates


Thank You for AttendingIf you enjoyed this class – Tell a friend

Please tell us how we’re doingFollow up email includes a link to “Praise” page

Your feedback is greatly appreciated

For more information

1-866-667-6724Homeownership Educator

Scott SchangBranch Manager

Broadview Mortgage Corporation