A first-time buyer in Oakland uses a CalHFA conventional loan to purchase a home for $450,000 with 3% down payment. CalHFA's MyHome Assistance Program provides a subordinate loan of up to 3.5% of the purchase price for down payment assistance. If the buyer uses the maximum MyHome assistance, how much additional cash does the buyer need for the down payment?
Correct Answer
C) $0 total
Down payment = $450,000 × 3% = $13,500. MyHome Assistance = $450,000 × 3.5% = $15,750. Since MyHome ($15,750) exceeds the required down payment ($13,500), the buyer needs $0 additional cash for the down payment. Excess may go toward closing costs.
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Related Topics & Key Terms
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Related Concepts
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
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