The California Housing Finance Agency is teaming up with the Federal Housing Administration to offer 30-year fixed-rate loans to low- and moderate-income first-time homebuyers at below-market rates.

With mortgage rates already at historic lows, eligible borrowers could lock a CalHFA-FHA loan at around 4 percent.

First-time homebuyers using the CalHFA-FHA program may also be able to make a downpayment of as little as 1 percent if they also qualify for CalHFA’s downpayment assistance program.

The loans are limited to $417,000, and borrowers must meet a number of eligibility requirements, including minimum credit score, debt-to-income ratio, and income limits that vary by county and family size.

The state’s budget crisis, along with turmoil in bond markets that fund CalHFA loans, forced the agency to suspend its 30-year fixed-rate mortgage loan and downpayment assistance programs in December 2008.

CalHFA restored its downpayment assistance program in May 2009, and announced a new 30-year fixed-rate mortgage the following month that was limited in scope because it did not rely on bond financing.

"With the disruption in the credit markets over the last two years, we have been limited in our ability to help finance home purchases," said Steven Spears, executive director of CalHFA, in a press release. "This new program offers California families another way to purchase their first home with reliable, fixed-rate financing."

CalHFA financing is available through approved lenders listed on the agency’s website.

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