Loan program for California public employees

I recently sold one of my listings to a buyer who was getting a CalPers loan. I had heard of this loan program but was not very familiar with how it worked or what a great product it was. Here's how the program works:

You have to be a public employee such as a police officer, teacher, judge etc, who is in the CalPers retirement system. There is no minimum amount of time in the system, you can apply for a loan on you first day on the job.

CalPers advertises that it's loans are highly competitive, however applicants are told to examine their Truth in Lending disclosure closely and to always compare against other loan products before making a decision on what loan to get.

The CalPers program limits the first mortgage origination fee to 1.25% on a conventional loan and 1% on an FHA loan. Lenders can only charge up to $350 for all other lender fees regardless of fee type, except for discount points which may be charged to lower the interest rate. CalPers lenders can ask the borrower to pay third party fees such as title and escrow, credit report, appraisal, notary and recording fees etc.

Reduced title and escrow fees may be obtained by using specific title companies that have agreed to charge less for CalPers applicants.

This low down payment option has flexible credit guidelines for low-to-moderate income borrowers with limited cash resources. Offers more flexibility on credit histories and income sources. Cash reserves may not be required. Income restrictions can apply in certain areas, however there are no income limits in high-cost or Fannie Neighbors® areas. Income limits are higher in rural areas.

Below is the advertised rate as of 11/6/09 for a FHA loan with a 30 day interest lock

The CalPERS Member Home Loan Program is managed by CitiMortgage. If you'd like to talk to a Customer Relations Representative, just call (800) 874-7377 or visit: http://www.calpers.ca.gov/index.jsp?bc=/member/homeloan/home.xml