CalSTRS 80/17 Home Loan
Posted on 26. Jul, 2010 by Scott Schang in CalSTRS Teacher Loan, Slide Show Library, Video Library
The CalSTRS 80/17 is a special home loan purchase program available through the California State Teachers Retirement Program and is available to any employee of a California public school, school district or Community college system.
Although commonly referred to as a teacher loan, anyone eligible for CalSTRS benefits or anyone that receives a pay check from the school system is eligible for this program.
Follow are recording of an educational online class that describes in detail the qualifications and guidelines for the CalSTRS 80/17 home loan program. The video is approximately 40 minutes or you can flip through the power point presentation below to zero in on specific details of the program.
The CalSTRS 80/17 Home Loan Program was established in 1984 as a result of legislation that provided CalSTRS with a mortgage-backed security investment opportunity and restructured in July of 2004. It was designed as an additional source of home financing for its members and retirees giving them a great choice of mortage loans with competitive rates.
How this program benefits you: Borrowers can obtain a great laon with a competitive rate – and your money works for you since income derived from mortgage payments goes directly into the Teachers’ Retirement Fund.
Who qualifies for this program?
- Any employee of a public school – do not have to be a teacher
- Any employee of a community college – do not have to be a teacher
- Any employee of a school district
- Any member, working or non-working, of CalSTRS eligible for future benefits
Term: 30 Year term on both 1st and 2nd mortgages
CalSTRS 80/17 Interest Rates: Check Today’s Rates Here
Conforming Loan Amount: Up to $417,000 (Up to $505,612 – 1st & 2nd combined)
Non Conforming 1st Loan Amount: Ups to $536,082 (Up to $650,000 1st & 2nd combined)
Max Loan to Value (LTV) – 1st: 80%
Max Loan to Value (LTV) – 2nd: 17%
Max Combined Loan to Value (CLTV): 97%
Important LTV Note: LTVs must be exactly 80% and 17%
Loan Purpose: Purchase ONLY
Eligible Properties: Single Family Residence, Condominiums, Planned Urban Developments (PUD)
Down Payment: 3% (1% must be from borrower’s owen funds)
Sources of Closing Costs: Borrower’s own funds, seller contributions up to 3%, gift from relative, or unsecured grant from approved government agency.
2nd Mortgage: Deferred payments on the 17% 2nd mortage for the first 5 years. Interest rate is same as rate on 1st mortgage. Simple interest is accrued on 2nd mortgage and added to principle balance at the end of the 5 year deferred period. The new balance is then fully amortized for the remaining 25 years.
Own Other Properties: Borrower cannot own any other properties and only 1 CalSTRS mortgage at a time.
Minimum Credit Scores: 640 for Loan Amounts up to $400,000 / 740 for Loan Amounts between $401,000 and $650,000 (combined 1st & 2nd)
If you have any questions at all about the CalSTRS 80/17 home loan program, you can ask live by locating the “Live Chat Now” button, leave a comment below (we answer all questions) or shoot me an email.
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24 Responses to “CalSTRS 80/17 Home Loan”
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I am looking at an FHA refinance loan. It seems to be all that is available in my circumstances.
Hello. I need some advice and help with a refinance.
There were more CalSTRS 80/17 loans closed in 2009 than in the previous 9 years combined!
If you are not reaching out to this niche market, you’re missing the boat!
Ask me about how to take advantage of this incredible buyer source – Our business has tripled because of it!
Will this program work for school district employees who have recently foreclosed but credit score is within required limits? Thank you.
The CalSTRS 80/17 is a conventional fannie mae loan program. Unfortunately, the waiting period required after a foreclosure is more strict for this program.
Your quickest route to owning another home is by using an FHA loan. Following is an article regarding the waiting periods required for each loan type:
http://www.homeownershipuniversity.com/uncategorized/how-long-do-i-have-to-wait-after-a-bankruptcy-short-sale-or-foreclosure/
Does the CALSTRS 80/17 loan require mortgage insurance?
Hi Adam,
No, the CalSTRS 80/17 does not require mortgage insurance due to the fact that the first mortgage does not exceed 80% of the loan to value (LTV)
Hi Scott,
I learned more this morning by watching this video than a month of researching home buyer programs for teachers. I live in Berkeley. I don’t think there is a Broadview Mortage Company up in Norcal, is there? I am impressed and feel safe with your knowledge, can I get go through the process with you, living up here? How would that work?
Also, are there any first-time home buyer downpayment assistance programs that can be combined with CalSTRS?
Thanks!
Monica
Hi Monica,
Thank you very much for your kind words and yes, we can very easily get you qualified for the CalSTRS program. We do have a loan officer in Dublin, and our main office is in Southern California. We help folks purchase using this loan all over the State of California. Most everything can be faxed or emailed and we can talk over the phone or by Skype. Either call, text or send me an email with the best time and number to reach you and I’ll put you in touch with a loan specialist to help answer all of your questions and get you approved.
In regards to the down payment assistance program. The CalSTRS program doesn’t allow any other liens (down payment assistance) but the deferred second mortgage is kind of like assistance! There are a couple of other programs we can also talk about that do offer assistance that might also interest you.
You can call/text my cell at 714-336-8286 or email your contact information at [email protected]
I have already been pre approved for a CalSTRS 80/17 loan in California and was wondering about the interest on the second loan. Is the interest on the second loan that accumulates over the first five years tax deductable when it rolls into the rest of the loan at the 5 year mark?
Chuck, I apologize for the delay in answering this. I am going to ask our resident teacher/tax planner, Bryan Schurter to clarify but I believe that because that interest is rolled into the original principle and then fully amortized over 25 years you would not receive a 1098 mortgage interest statement for that deferred interest because it has not been paid.
I will ask Bryan to clarify tomorrow morning.
Chuck, Scott is correct. Mortgage interest is only deductible in the year that it has been paid.
The fact that interest is accumulating does not make it a deduction – only when that interest is paid.
So since the interest is being deferred, and you are not paying interest on the 2nd during the first five years, you won’t be receiving a 1098 mortgage interest statement on that loan.
I hope this all makes sense and answers your question.
From what I know of the 80/17 program – it looks like a wonderful opportunity for people in the CalSTRS system.
Scott
I am a realtor, and want to use this information to help a group of teachers know about such a great loan. Can I copy some of this information and quote you on this material? I would also like to feature it, with your permission, in my blog.
http://californiahomes.featuredblog.com/
Thanks
Jorge Rodas
http://californiahomes.featuredblog.com/
Jorge, thank you for being an advocate for helping educators!
You can absolutely use any of the content you find on this site to help educate and empower homebuyers and homeowners.
All I ask is that you give us credit and link back to the original source
Hi there -
Is the second mortgage on the CALSTRS 80/17 program a NON-recourse loan? Thanks.
Hi Cynthia,
Yes. All “purchase money” is non-recourse in the State of California. Once you refinance or take cash out, that’s where recourse becomes a concern.
Hi,
Quick question… my husband and I are both teachers, but I was laid off a couple of years ago (2009). I’ve been tutoring since 2010 and subbing since earlier this year (2011). Our real estate agent said that she could only use my husband’s income since he had been working consistently at the same place for over 2 years. I’ve never not worked, but in 2009, I did have a period of time where I did not work (we had a baby). Does all this seem accurate? Is it true that we can only use his income? We have no credit card debt, good assets, good credit scores. I am just wondering how this all works exactly. Thank you in advance!
Hi Monica,
Make sure your lender is the one giving you information about your loan, just to make sure. Income qualification can be a bit tricky. You have to have 2 years experience in the same field, not necessarily the same place. Gaps in employment can be explained and exceptions made, for instance, the birth of a child. What the lender is looking at is consistency in income, experience and the probability of continued employment as stated by your current employer on a Verification of Employment form. The lender will send this form to the employer. Again, your underwriter will have to look at everything to determine what can and cannot be used.
Are we your lender? What is your loan officer telling you?
Hope this helps!
Hello Scott,
I just recently learned about this loan program from a teacher I work with.
Around 3-4 years ago, I settled several of my credit card accounts since I was having financial hardship following a divorce and was earning less income. The settlements, of course, show up on my credit report. My financial situation has improved since then. My debts right now are a student loan and car note which are in good standing. When I bought the car a little over a year ago, I was told two of my credit scores were 630 and 671.
My questions are, how long should I wait before I apply for a CalSTRS home loan? How will the adverse accounts affect my eligibility for a loan? Would having more money in my savings account make me more credit worthy or would it be better to pay more towards my current debt to bring the balances down?
Thanks in advance!
These are great questions!
The minimum credit score required is 640. The lender is going to take the middle score of your 3 credit scores.
Really, the only way to answer your questions with any accuracy is to simply go through the approval process for the loan. There’s no cost to try, it’s quick and really easy.
Even if you are not in a position to buy right now, at least we can create a plan for getting you where you need to be.
I am going to have a CalSTRS 80/17 specialist send you an email with their contact information so you can get all of your questions answered.
Hope this helps!
Hi Scott! Thanks for the informative site! I’d like to take advantage of SMARTMOVE with the CalSTRS loan program. I just started teaching this year, but I have good credit (700+) and some liquid assets (roughly 6 months mortgage/personal payments for a $350K home). Prior to this year, I had temp teaching jobs/was in school to get my teaching credential (since 2008). How hard would it be for me to qualify for these programs? Thanks!!!
Hi Jay,
You are definitely eligible for the CalSTRS 80/17 due to your employment. We will need some documentation showing you were getting your teaching credential last year, you will need to document 2 years in the same line of work, education counts as experience in this case. Qualifying is pretty easy. I am going to ask a CalSTRS specialist from my office to shoot you an email with their contact information and a list of the documents you will need to get approved for the loan.
Once you are pre-approved for financing, it’s time to look at homes. SMARTMOVE is a program that CalSTRS negotiated with a Real Estate chain to offer a rebate to you from their commissions. I really have mixed feelings about this. I like to introduce home buyers to a real estate agent that I know, I trust and have confidence that they will represent you and your interests…I am less comfortable being assigned to some agent that’s willing to work for a discount. This is totally just my opinion, for what it’s worth.
Hello Scott,
My wife is a teacher and we were looking into the 80/17 program, but it appears that the program has been discontinued. Is there another comparable program out there now or any hope on the horizon that the 80/17 program will return. We live in San Luis Obispo, CA. Your input is much appreciated.
Hi Devin, the CalSTRS 80/17 has been discontinued. There are rumors that they are coming out with another program, here are the guidelines they put out about the possible new program – http://www.homeownershipuniversity.com/home-buyers/home-purchase-loan/calstrs-teacher-loan/calstrs-8017-discontinued/
FHA rates are actually lower than conventional rates right now, and the CalSTRS programs are usually a little higher than that. I would be happy to look at your information and see what options are available now. If CalSTRS does bring back another program, you’ll have that option available as well.
Hope this helps?