Do all CHFA loans have to be insured?
Yes, under most CHFA loan programs federal mortgage insurance is required. The mortgage must be insured either through the Federal Housing Administration (FHA), the Veterans Administration (VA), or the USDA Rural Development (RD). However, no mortgage insurance is required when a borrower makes a down payment of at least 20% on a newly constructed home in a federally targeted area. In special circumstances private mortgage insurance is permitted. The borrower can qualify for private mortgage insurance (PMI) when he puts 15% down on a home in a targeted area and the mortgage exceeds the FHA loan limits but is within the CHFA sales price limits for that area. There are also specific loan programs geared to help with upfront home purchase costs that allow PMI.
