Overview

The California Housing Finance Agency (CalHFA), established in 1975, is a completely self-supporting state agency that makes low-rate loans through the sale of tax exempt bonds

Bond (finance)

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

. CalHFA also issues bonds which are taxable by the federal government.
It is part of the California Business, Transportation and Housing Agency

California Business, Transportation and Housing Agency

The California Business, Transportation and Housing Agency is a state cabinet-level agency in the government of California. The Business, Transportation and Housing Agency is responsible for oversight of 14 offices and departments and four economic development programs and initiatives within the...

. Known until 2002 as CHFA (commonly pronounced "cha-fuh"), CalHFA was rebranded "to keep pace with our expanding audience and the growing needs of the affordable housing marketplace" and "to elevate CalHFA’s profile on all key fronts."
Historically, CalHFA has provided housing assistance in three areas: below-market interest rate mortgages and downpayment assistance for first-time homebuyers, most of whom were low- and moderate income families and ethnic minorities not well-served by market rate products, insurance for single-family home purchase mortgages, and loans for the development of multifamily rental housing. These financial products were funded through sale of revenue bonds secured by the mortgage products and the underlying property. The operating costs of the agency are paid by origination and service fees, and the difference between the interest paid on outstanding debt and the interest charged on the loans made. Beginning in 2002, passage of Proposition 46 (2002)

California Proposition 46 (2002)

Proposition 46 was a California ballot proposition on the November 5, 2002 ballot. The official title was Housing and Emergency Shelter Trust Fund Act of 2002. It passed with 3,984,121 votes in favor and 2,942,851 against...

 provided funding for additional activities through sale of general obligation bonds. This source of funding was extended by passage of Proposition 1C (2006).

Recovery

As of September 2010, CalHFA offered two first mortgage loans for first-time homebuyers. The Cal30 loan is insured conventionally, while the FHA loan is insured by the Federal Housing Authority. CalHFA also offers down payment assistance loans, the most notable being the California Homebuyer's Downpayment Assistance Program, which contributes up to 3% home's value for closing costs or down payment assistance.