Understanding the Deferred Payment Structure and Repayment Triggers
One of the key benefits of the California Dream For All Shared Appreciation Loan is its deferred payment structure. This means that you won't need to make any monthly payments on your shared appreciation loan until one of several repayment triggers occurs. By deferring payments, the program helps to keep your monthly housing costs more affordable and allows you to focus on building equity in your home.
Repayment Triggers for the California Dream For All Shared Appreciation Loan
You will be required to repay your California Dream For All Shared Appreciation Loan, including the original loan amount and any shared appreciation, upon the earliest occurrence of one of the following events:
- Sale of the property
- Transfer of title
- Payoff of the first mortgage
- Payoff of the subordinate loan principal balance
- Refinance of the first mortgage (see the "Refinancing and Re-subordination" section below)
- The formal filing and recording of a Notice of Default, unless rescinded
It's important to note that the California Dream For All Shared Appreciation Loan is not assumable, meaning that the loan cannot be transferred to another borrower.
Refinancing and Re-subordination
If you choose to refinance your first mortgage, you may be required to repay your California Dream For All Shared Appreciation Loan at that time. However, CalHFA allows borrowers a one-time option to refinance their first mortgage into a single limited cash-out refinance without requiring immediate repayment of the shared appreciation loan, provided that you comply with CalHFA's re-subordination policy.
This one-time refinance option can help you take advantage of lower interest rates or more favorable loan terms while still maintaining the deferred payment structure of your shared appreciation loan.
Tennant Lending: Helping You Navigate the Repayment Process
At Tennant Lending, our experienced mortgage professionals are here to help you understand the repayment triggers and deferred payment structure of the California Dream For All Shared Appreciation Loan. We can guide you through the various scenarios that may require loan repayment and help you plan for these events as a responsible homeowner.
As a CalHFA-approved lender serving Northern California, we are dedicated to providing you with the information and support you need to successfully navigate the repayment process. Contact Tennant Lending today to learn more about when you'll need to repay your California Dream For All Shared Appreciation Loan and how we can help you prepare for this important milestone in your homeownership journey.
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