Understanding the One-Time Refinance Option and Resubordination Requirements

As a homeowner with a California Dream For All Shared Appreciation Loan, you may find yourself in a situation where refinancing your first mortgage makes financial sense. Whether you're looking to take advantage of lower interest rates, change your loan term, or switch from an adjustable-rate to a fixed-rate mortgage, refinancing can be a smart move. However, you may be concerned about how refinancing will impact your shared appreciation loan.

The One-Time Refinance Option

Recognizing the potential benefits of refinancing, CalHFA allows borrowers with a California Dream For All Shared Appreciation Loan a one-time option to refinance their first mortgage without requiring immediate repayment of the shared appreciation loan. This means that you can refinance your first mortgage once during the life of your shared appreciation loan while maintaining the deferred payment structure of the program.

To qualify for this one-time refinance option, you must:

  1. Refinance into a single limited cash-out refinance, as defined by Fannie Mae
  2. Comply with CalHFA's resubordination policy

Resubordination Requirements

When refinancing your first mortgage, you'll need to ensure that your California Dream For All Shared Appreciation Loan remains in its original subordinate position. This process, known as resubordination, is essential to maintain the terms and benefits of your shared appreciation loan.

To comply with CalHFA's resubordination policy, you'll need to provide documentation to demonstrate that your refinance meets the program's requirements. This may include proof that you're refinancing into a limited cash-out refinance, as well as other information about your new loan terms and financial situation.

Benefits of the One-Time Refinance Option

By allowing a one-time refinance without requiring immediate repayment of the shared appreciation loan, CalHFA provides borrowers with the flexibility to:

  1. Take advantage of lower interest rates
  2. Reduce monthly mortgage payments
  3. Switch from an adjustable-rate to a fixed-rate mortgage
  4. Change the loan term to better suit their financial goals

This one-time refinance option can help you optimize your home financing while still benefiting from the deferred payment structure and shared appreciation model of the California Dream For All program.

Tennant Lending: Your Partner in Refinancing with a Shared Appreciation Loan

At Tennant Lending, our knowledgeable mortgage professionals are here to help you understand your refinancing options as a California Dream For All Shared Appreciation Loan borrower. We can guide you through the one-time refinance option, assist you in gathering the necessary documentation for resubordination, and help you determine if refinancing is the right choice for your unique financial situation.

As a CalHFA-approved lender serving Northern California, we are committed to providing you with the information and support you need to make informed decisions about your home financing. Contact Tennant Lending today to learn more about refinancing your first mortgage with a California Dream For All Shared Appreciation Loan and how we can help you navigate the process.

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