State offers 40-year mortgage
State offers 40-year mortgage
SACRAMENTO
March 17, 2006 6:59am
• Expects to make homes more affordable
• For first-time buyers
The California Housing Finance Agency, a state agency that offers Californians special loan programs for first-time homebuyers, is now offering a mortgage that takes as long as 40 years to pay off.
CalHFA says it will let more first-time homebuyers qualify to buy.
“The low fixed interest rate combined with a longer term on our new 40-year fixed mortgage give comfort to first-time homebuyers,” says Theresa Parker, CalHFA executive director, in a written comment.
The new mortgage product follows 2005’s introduction of a mortgage, which has interest-only payments for its first five years. Today, more than a third of CalHFA’s loans are fixed rate interest-only loans, which give borrowers five years of interest-only payments before principal payments begin, and all 35 years stay at the same fixed rate, the agency says.
The fixed rate on the 40-year mortgage will initially be 5.75 percent, about one point below average market rates for 40-year mortgages.
Loans from CalHFA are available to low and moderate-income first-time homebuyers who meet CalHFA income limits and who are purchasing homes that fall at or below CalHFA sales price limits. The sales price and income limits vary by county.
Established in 1975, CalHFA has invested more than $14 billion in non-taxpayer funds to help 135,000 California families buy their homes.