The following guidelines apply to all CalHFA Subordinate Loan Programs. CalHFA wants to remind lenders of these important guidelines to ensure a timely purchase and servicing of these programs.

• CalHFA subordinate loan programs cannot be used to pay off debt
• Borrower cannot receive any cash back from CalHFA subordinate loan programs
• Non-Purchasing spouse can’t be on the vesting, the purchase agreement, or the Deed of Trust
• CalHFA subordinate loans are not assumable
• CalHFA subordinate loans cannot be re-subordinated (includes PACE or HERO loans)
• CalHFA subordinate loan recipients will receive a tax statement, if $600 or more is paid in interest
• CalHFA subordinate loan recipients will receive a 1099 tax statement for any money that is forgiven on a loan
• CalHFA grant recipients will receive a 1099 tax statement for the amount of the grant
• CalHFA subordinate loans are deferred payment loans and must be repaid according to the Note and Deed of Trust
• Payments are allowed unless expressly prohibited in the Note and Deed of Trust