For many first-time homebuyers, saving for a down payment is the biggest obstacle to purchasing a home. One of California’s most well-known solutions is the California Housing Finance Agency (CalHFA) MyHome + ZIP program, which combines down payment assistance with help covering many of the upfront closing costs.
For eligible buyers in the Temecula Valley, this program can significantly reduce the amount of cash needed to purchase a home. It is especially attractive for the buyer who has no down payment saved.
A Brief History of CalHFA
The California Housing Finance Agency (CalHFA) was established in 1975 to expand affordable homeownership opportunities throughout California. Rather than lending directly to consumers, CalHFA partners with approved mortgage lenders that originate loans meeting CalHFA guidelines.
Unlike programs funded by a limited annual grant allocation, CalHFA primarily raises capital through the issuance of bonds and other financing mechanisms. As a result, funds generally do not “run out” while you’re shopping for a home in the same way some grant programs can, although individual program guidelines, interest rates, and available products may change over time.
How the Reservation Process Works
Once your loan is approved and you’re under contract on a home, your lender reserves the CalHFA program and locks the applicable interest rate and assistance available at that time.
Because assistance is tied to a reservation, buyers don’t need to worry about funds disappearing or the interest rate spiking while they’re still searching for a property.
How MyHome + ZIP Works
CalHFA assistance is often paired with either a Conventional or FHA first mortgage.
MyHome provides a deferred-payment junior loan that can be used toward the down payment and, in many cases, certain closing costs. No monthly payments are required on the MyHome loan. Instead, repayment is generally deferred until the home is sold, refinanced, transferred, or the first mortgage is paid off. This typically has accruing interest on top of the principal owed.
The ZIP (Zero Interest Program) provides an additional deferred-payment junior loan that helps pay eligible closing costs. As its name suggests, the ZIP loan carries no interest, and repayment is also generally deferred until a future triggering event, such as a sale or refinance.
These are not grants. Both assistance loans typically must be repaid according to CalHFA program terms. When you combine the two, the interest rates spike – so it should be laid-out 1) 1st TD + My Home only with a large seller credit or 2) 1st TD + My Home + Zip. Terms and interest rates will vary, depending on how the assistance is used, so ask your loan officer to see a loan comparison is the best-practice.
Conventional vs. FHA Options
The program can be paired with either:
- CalHFA Conventional: Uses a Conventional first mortgage while combining it with MyHome and ZIP assistance for eligible borrowers.
- CalHFA FHA: Uses an FHA-insured first mortgage with the same assistance structure, often benefiting buyers who qualify more comfortably under FHA’s flexible underwriting guidelines.
Your mortgage professional can help determine which option best fits your credit profile, debt-to-income ratio, and financial goals.
Eligibility Requirements
To qualify, borrowers generally must:
- Be first-time homebuyers, meaning they have not owned and occupied a principal residence during the previous three years.
- Meet CalHFA income limits for Riverside County.
- Meet minimum credit score requirements established by the first mortgage program and CalHFA.
- Meet maximum debt-to-income ratio guidelines.
- Occupy the home as their primary residence.
Income limits and underwriting guidelines are updated periodically, so buyers should confirm current eligibility before applying.
Additional Program Requirements
CalHFA also requires:
- Completion of an approved homebuyer education course before closing.
- A one-year home warranty on the property.
- Two separate approval processes:
- Underwriting for the first mortgage.
- A separate CalHFA review to verify income and program eligibility.
Final Thoughts
CalHFA MyHome + ZIP remains one of California’s most valuable down payment assistance programs for eligible first-time homebuyers. By combining deferred-payment assistance with either Conventional or FHA financing, the program helps reduce upfront cash requirements while making homeownership more accessible throughout the Temecula Valley. An experienced CalHFA-approved lender can help determine whether this program is the right fit for your homeownership journey.
