Affording a Home in High-Cost Areas

California's affordable housing authority has joined forces with mortgage lender Countrywide Home Loans, Inc. and a non-profit housing organization to create a program designed to tackle a difficulty in that state: helping middle income borrowers qualify for a homes in high-cost areas.

The pilot program, called the Cal Jumbo Loan Program, offers the high loan-to-value benefits of jumbo financing with more flexible underwriting standards. As a result, eligible borrowers can qualify for up to 105 percent loans using a combination of first and second loan financing packages.

The loan thresholds go up to $550,000 for new construction or $500,000 for existing homes, a needed boost in some areas of the state where a growing spread exists between family income and median home prices. Income limits, home sales price ceilings and loan amounts vary by county.

Copyright © 2004 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 13, No. 11, 1/04