CalHFA Junior Loans Subordination Process

CalHFA is deliCalHFA Junior Loans Subordination Process for Homeownersghted to state that the new legislation has allowed the subordination of additional CalHFA junior loans that are being offered if homeowners meet certain requirements for eligibility. This legislation will be a great help to the current homeowners to keep their homes as it allows them to refinance their present first mortgage and it will not be mandatory to pay off their existing CalHFA junior loan(s).

Subordination Process For CalHFA Junior Loans

Recent legislation has enabled CalHFA to permit the subordination of existing CalHFA junior loans if homeowners meet certain eligibility requirements. The purpose of this legislation is to help existing homeowners keep their homes by allowing them to take advantage of refinancing their existing first mortgage and not be forced to pay off their existing CalHFA junior loan(s). Homeowners must have demonstrated hardship and be refinancing their first mortgage to avoid foreclosure. To be eligible, all of the following minimum requirements must be met.

To be entitled to subordinate a CalHFA junior loan, one should meet all the following minimum requirements:

  • The borrower has a shown hardship
  • Subordination is needed to evade foreclosure
  •  The new first mortgage loan meets the requirements of Agency underwriting

Eligible CalHFA junior loans now comprise of the following:

  • CalHFA Housing Assistance Program (CHAP)
  • California Homebuyer’s Downpayment Assistance Program (CHDAP)
  • extra Credit Teacher Program (ECTP)
  • High Cost Area Home Purchase Assistance Program (HiCAP)
  • Homeownership in Revitalization Areas Program (HIRAP)

Subordination Process requirements, forms  and procedures can be found on CalHFA web site

Homeowners with a Keep Your Home California (KYHC) junior lien should get in touch with  KYHC directly at 888.954.5337 or go to for full subordination requirements.  For questions about this announcement, contact Single Family Lending division by phone 916.326.8000, fax 916.327.8452, or email [email protected]  In addition, you can always visit CalHFA’sweb site at or Single Family Lending directly at

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About Ric Dizon

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