STRS Loan
STRS loans are special loans available to public school district and community college employees in the state of California who are members of the State Teachers' Retirement System. You can actually qualify for a STRS loan even if you are an inactive STRS member, as long as you have money in the STRS retirement account or if you are a retired STRS member. STRS loans are only for individuals who plan on purchasing a home that will be used as their primary residence in the state of California.
There are 3 different types of STRS home loans. There is a Conventional Standard STRS Loan, an 80/17 STRS loan, and a reverse mortgage STRS loan. First time buyers should consider either the conventional Standard Loan or the 80/17 Loan.
STRS loans are special loans available to public school district and community college employees in the state of California who are members of the State Teachers' Retirement System. You can actually qualify for a STRS loan even if you are an inactive STRS member, as long as you have money in the STRS retirement account or if you are a retired STRS member. STRS loans are only for individuals who plan on purchasing a home that will be used as their primary residence in the state of California.
There are 3 different types of STRS home loans. There is a Conventional Standard STRS Loan, an 80/17 STRS loan, and a reverse mortgage STRS loan. First time buyers should consider either the conventional Standard Loan or the 80/17 Loan.
The STRS Conventional Standard Loan offers both a 15 and 30 year mortgage, whereas, the 80/17 Loan offers a 30 year mortgage. Both of these types of home loans offer a fixed interest rate. The main difference between the loans is that the 80/17 loan is actually 2 loans. Borrowers start paying the first loan (80%) of the home value right away, then 5 years down the road, the borrower will start paying the 2nd loan, which comprises 17% of your home value.
Another difference is that the 80/17 loan requires a 3% down payment and the Conventional Standard Loan requires 5% down payment. To qualify for the 80/17 loan, you cannot have any other home loans in your name, where as the Conventional Standard Loan you may own other properties.
STRS also offers a reverse Mortgage. A reverse mortgage can be beneficial to homeowners who are 62 or older in order for them to access equity in their homes. If the homeowner chooses a reverse mortgage, the loan can be arranged as lump sum, monthly payment, or line of credit.
Another difference is that the 80/17 loan requires a 3% down payment and the Conventional Standard Loan requires 5% down payment. To qualify for the 80/17 loan, you cannot have any other home loans in your name, where as the Conventional Standard Loan you may own other properties.
STRS also offers a reverse Mortgage. A reverse mortgage can be beneficial to homeowners who are 62 or older in order for them to access equity in their homes. If the homeowner chooses a reverse mortgage, the loan can be arranged as lump sum, monthly payment, or line of credit.
There are many advantages of choosing a STRS loan. STRS loans have very competitive rates. In addition, the lender will provide you with a free 45 day interest rate lock to protect you from rising interest rates. CalSTRS will offer you a float down option if rates fall after you have applied for your loan in order to save you additional money.
Another advantage is when using an 80/17 loan; homeowners have a break on their mortgage up front for the first five years, before having to begin payments on the second loan. This allows public school employees time to gain income as they naturally progress up the pay scale. Also, any income derived through the CalSTRS Home Loan Programs goes directly to the State Teachers’ Retirement Fund, so your money really is working for you. Finally, CALSTRS has negotiated discounts on escrow fees and insurance rates so that you can save additional money when purchasing a home.
In September 2011, CalSTRS suspended its home loan program, temporarily cutting off a vehicle that's funded $5.9 billion worth of mortgages since its inception in 1984. the program is being suspended because Bank of America, which runs the program, is selling the unit that operates that business. CalSTRS is working hard to bring back the Home Loan Program, however, the process of reestablishing the structure needed to resume new loan originations will take time.
Refinances are allowed with the CalSTRS Conventional Standard Program.
Borrowers with conforming CalSTRS 80/17 or 95/5 mortgages may be eligible to refinance using the Home Affordable Refinancing Program (HARP), part of the federal government’s Making Homes Affordable (MHA) initiative. This program applies to qualifying first mortgages only, not second liens. The previously offered non-conforming mortgages under the 80/17 or 95/5 program are not eligible.
STRS Loan | STRS Conventional Loan | STRS 80/17 Loan | STRS Reverse Mortgage
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Another advantage is when using an 80/17 loan; homeowners have a break on their mortgage up front for the first five years, before having to begin payments on the second loan. This allows public school employees time to gain income as they naturally progress up the pay scale. Also, any income derived through the CalSTRS Home Loan Programs goes directly to the State Teachers’ Retirement Fund, so your money really is working for you. Finally, CALSTRS has negotiated discounts on escrow fees and insurance rates so that you can save additional money when purchasing a home.
In September 2011, CalSTRS suspended its home loan program, temporarily cutting off a vehicle that's funded $5.9 billion worth of mortgages since its inception in 1984. the program is being suspended because Bank of America, which runs the program, is selling the unit that operates that business. CalSTRS is working hard to bring back the Home Loan Program, however, the process of reestablishing the structure needed to resume new loan originations will take time.
Refinances are allowed with the CalSTRS Conventional Standard Program.
Borrowers with conforming CalSTRS 80/17 or 95/5 mortgages may be eligible to refinance using the Home Affordable Refinancing Program (HARP), part of the federal government’s Making Homes Affordable (MHA) initiative. This program applies to qualifying first mortgages only, not second liens. The previously offered non-conforming mortgages under the 80/17 or 95/5 program are not eligible.
STRS Loan | STRS Conventional Loan | STRS 80/17 Loan | STRS Reverse Mortgage
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