Home Loans More Accessible for School Teachers

Business Wire, Nov 28, 2001

Business/News Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--Nov. 28, 2001

Buying a home just got easier for California's public school teachers.

The California Housing Finance Agency (CHFA) today announced statewide implementation of a program developed between the California State Teachers' Retirement System (CalSTRS) and the California Housing Loan Insurance Fund (CaHLIF), the mortgage insurance arm of CHFA.

"We see this innovative partnership between CalSTRS and CAHLIF as setting a standard of cooperation to provide a common good," said James D. Mosman, CalSTRS Chief Executive Director. "It's California's teachers that will reap the benefits."

The program consists of an 80% first loan and a 17% "silent" second loan featuring deferred payments and simple interest. Since teachers only have to qualify for a loan on 80% of the purchase price, a greater number of educators will be able to buy a home. Combined total of the first and second loan cannot exceed $350,000, the CalSTRS maximum loan amount.

"This program is intended to help bridge the enormous gap between teachers' salaries and the high cost of housing in California," said CHFA Executive Director Theresa Parker. "80/17 is one more example of how we are all working to help ease California's affordable housing and educational crises."

Started as a pilot program in Los Angeles in May, CalSTRS 80/17 went statewide this month. Said John Schienle, Director of CaHLIF, "We have met with tremendous success with 80/17 in Los Angeles. Lenders are anxious to extend that success to the rest of the state."

All employees of California's public schools and members of CalSTRS are eligible for 80/17. Loans are not secured against participants' retirement accounts.

While 80/17 works effectively across the board, it was originally designed for those wishing to purchase a home in high-cost areas. "80/17 helps out people who want to live in a certain area but can't afford to," said Schienle. "They can buy more house with less money."

For more information about the 80/17 program call 916/322-8936. Participating lender information is available on the CalSTRS website at www.calstrs.ca.gov.

CHFA was created in 1975 as California's affordable housing bank to help meet the housing needs of people with low to moderate incomes.

Established in 1913, CalSTRS provides retirement benefits to California's public school educators from kindergarten through community college. CalSTRS serves about 496,000 California teachers and provides benefits to approximately 165,000 retired or disabled educators and their families.