Can CalHFA subordinate loan(s) be “subordinated”?
Most subordination requests are the result of a refinance of the first. The language in CalHFA second Notes ties the loan to certain events that can occur on the first (maturity, sale, refinance) and the Notes do not otherwise have maturity dates of their own and cannot stand once the first is gone; therefore these loans cannot be subordinated. The California Homebuyer’s Downpayment Assistance Program (CHDAP) loan program has an exception to this rule under certain conditions which are explained in the document at http://www.calhfa.ca.gov/homeownership/programs/chdap-subordination.pdf.
