One of the many ways the state of California rewards its teachers is with the Extra Credit Teacher Home Purchase Program, or ECTP. This special program is one of the many financing assistance options offered by the California Housing Finance Agency, or CalHFA. This program helps those who qualify secure additional funds needed to buy and finance a home by providing cash at the closing table to assist with a down payment and closing costs. It’s an excellent program yet it might be a bit difficult to find lenders who are approved for this assistance. Not because it’s hard to qualify for but many lenders simply ignore it. Not us.
How does it work? The ECTP comes in the form of a junior loan that ranges from $7,500 to $15,000 depending upon the location of the property being financed and can be used toward the down payment. The ECTP is available for teachers, school administrators as well as employees and staff of schools in California and used in conjunction with an eligible CalHFA mortgage. Buyers must be employed with a County/Continuation of High Priority school. Your loan officer can explain the options and can identify a High Priority school for you.
Now about that down payment. Say there is a home listed at $250,000 and the down payment of 3.5%. That means the buyers need $8,750 for a down payment. The buyers can then use the funds they have saved for the closing costs associated with the loan as the down payment has been secured through the ECTP program.
The home must be located within an approved area and must meet certain sales price limits that are set by county. Buyers must also complete a homebuyer education course either online or in person and receive the course completion certificate that will be included with the loan application and the buyers must also meet certain income limitations as well. Only CalHFA approved loan officers have the authority to offer and consult for this special loan program and can be used to buy and finance a single family, owner-occupied residence as well as condominium projects that meet the guidelines of the first mortgage. The ECTP junior loan is a deferred payment loan and does not have to be repaid until the property is sold or refinanced.
If you fit the employee qualifications for this special loan program and are thinking about buying a home now, you should really check out the ECTP process. Remember there are also closing costs to be aware of and your loan officer can provide you with an estimate of funds needed for closing costs as well discuss interest rates and prequalification with you in person or over the phone.
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