CalSTRS Loan Program

The CalSTRS 80/17 loan program is designed specifically for eligible employees and members.  Inland Empire home buyers who meet this specialty loan program guidelines, will have an additional option in their choice of home loan financing. 

Some of the highlights of this program include a 3% down payment with only a 1% required cash investment, no mortgage insurance,  1st and 2nd mortgages carry the same interest rate that is amortized for 30 years.  But the best part is the payment on the 2nd mortgage is deferred for the first five years of the loan.

Even though this program has some unique benefits, this may not be the best option for every home buyer who is eligible for the CalSTRS 80/17.  It is always in a new home buyers best interest to review all loan program options before committing to a program that may have a negative impact on your overall financial portfolio.  A seasoned mortgage professional should be your first choice in seeking out expert advice on such a large investment.

Here is an overall review of the program and who can qualify.

ELIGIBLITY-The CalSTRS Home Loan Program has funds available in the state of California for:

• Employees of California public school districts and community colleges.
• Members of the California State Teachers’ Retirement System.
• CalSTRS Employees.

INTEREST RATES-Rates are set by CalSTRS and can be viewed on the CalSTRS website:

• Allows for a free 40-day interest rate lock upon application submission.
• Allows for a free 15 day extension.
• Allows for a free rate float down if rates fall.
• 2nd Mortgage carries the same note rate as the 1st mortgage

ELIGIBLE PROPERTY TYPES:

• Single Family Residence-1 unit only.
• Condos and PUD’s-must meet Fannie Mae eligibilty guides.

PURCHASE PRICE/LOAN LIMITS:

• Conforming:  Maximum purchase price-$521,250 with a maximum combined loan limit of $505,612.
• Non-Comforming:  Maximum purchase price-$670,103 with a maximum combined loan limit of $650,000.

FICO SCORE REQUIREMENTS:

• Min. Fico of 640 is required for loan amounts up to $400,000 (combined 1st and 2nd mtgs.).
• Min. Fico of 740 is required for loan amounts between $400,001 and $650,000 (combined 1st and 2nd mtgs.)

LOAN TERM/PURPOSE:

• 80/17 Program available for purchases only.
• 80/17 Program only offers 30 year fixed loans.
• Primary residence only.

DOWN PAYMENT/HOME BUYER CONTRIBUTION:

• A 3% down payment is required.
• A minimum of 1% must come from the borrowers own funds.
• The balance of the down payment may come as a gift, grant from a government agency or an employer assisted housing program.

SECOND MORTGAGES:

• The 2nd mortgage has the same rate set by CalSTRS as the 1st mortgage.
• Carries a 30 year loan term with a 5 year deferred payment structure.
• Interest is calculated using simple interest for years 1-5.
• There are no 2nd mortgage payments of principle or interest for the first 5 years (payment is not calculated into the DTI).

ADDITIONAL INFORMATION:

• Temporary and permanent buy downs are not allowed on teh CalSTRS program.
• Non-occupant co-borrowers are not allowed.
• Home Buyer Education is no longer required for FTHB.
• CalSTRS retirement account may not be used as cash reserves.
• Borrower and/or borrowers spouse may not own any other properties.
• Impounds are required.