How California's new home loan program works

What it does: Provides reduced interest rate, 30-year fixed mortgages (currently at 5.5 percent) to help first-time home buyers purchase select bargain-priced foreclosed homes in Stanislaus, San Joaquin and Merced counties.

Who can participate: First-time buyers who purchase homes to occupy as their primary residence. They must be U.S. citizens or legal residents who meet credit, income and loan requirements.

Who's in charge: California Housing Finance Agency. The $200 million program is expected to help 800 to 1,000 families buy homes.

Income limits: Couples can earn up to $67,800 in Stanislaus and Merced, and up to $73,560 in San Joaquin. Limits are higher for families with three or more people.

Credit scores: Borrowers must have credit scores of 660 or higher for loans up to 95 percent of the homes' value. Credit scores must be more than 680 to qualify for loans that exceed 95 percent of the homes' value.

Eligible homes: Only foreclosed homes selected for the program by Fannie Mae, CitiMortgage, HomEq Servicing and Wells Fargo Premiere Asset Services are eligible. Homes must meet all CalHFA and Fannie Mae repair, inspection, and health and safety code requirements. Nearly 100 homes are on the eligibility list now in Stanislaus, San Joaquin and Merced counties, and more will be added each week. All listed homes are priced at least 12 percent below their estimated value.

Education required: Buyers must complete a home buyer education counseling program via the Internet, in person or by phone. A certificate of completion must be issued through Fannie Mae or Freddie Mac- identified counseling administration agencies, mortgage insurers or HUD-approved buyer counselors.

Lender requirements: Only CalHFA-approved lenders can be used. In Modesto that includes: Michael Content of MetroCities Mortgage, 549-4790; Tina Valenzuela of Guild Mortgage, 575-0501; Sondra Yates of Guild Mortgage, 572-7300; and Lemonia Yager of the former IndyMac Bank, 223-5800.

On the Net:

For more details, go to www.calhfa.ca.gov .