A buyer asks their agent how CalHFA income limits are determined and whether those limits differ depending on where in California the buyer is purchasing. Which of the following most accurately describes how CalHFA income eligibility works?
Correct Answer
B) Limits are set county by county from area median income and are not adjusted for household size
CalHFA publishes one income limit for each California county, built from area median income data for that county, so the ceiling in a high-cost coastal county is far above the ceiling in an inland rural one. The limit is not adjusted for household size: it is compared against the qualifying income used to underwrite the loan for the borrowers on it, so a larger family does not receive a higher ceiling. An agent should look up the current published limit for the county where the property sits rather than quote a statewide figure or scale a number by family size.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
More Financing Questions
Compliance case Cedar Docket frames the issue this way. A Florida buyer borrows $272,000 on a purchase price of $320,000. What is the loan-to-value ratio?
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