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Clarifications of Subordinate Loan Use and Property Zoning
Several lenders have asked CalHFA to clarify the use of its subordinate loans. All subordinate loans (currently MyHome, ZIP and ECTP) must be used for down payment and/or closing cost assistance only. They may not be used for:
- Paying the difference between the sales price and appraised value if the sales price is higher (Gap Financing)
- Paying off borrower debt
In addition, all CalHFA-financed properties must be zoned for Single Family Occupancy. Multifamily zoning is not permitted.
These guidelines are referenced in the CalHFA Lender Program Manual on Pages 5 and 22.
We thank you for your patience and
your continued partnership with CalHFA
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