The Los Angeles Times, citing a study issued by California's Senate Office of Oversight and Outcomes, reports that CalHFA has either begun foreclosure proceedings or threatened foreclosure against 200 borrowers who are no longer residing in their homes. State and federal regulations prevent CalHFA from lending money to borrowers that turn their homes into rental properties.
The state report determined that some of the borrowers rented out their homes and moved to more affordable housing because of job loss or financial hardship. The report added that CalHFA threatened foreclosure against 186 of these borrowers, even though they managed to remain current on their monthly loan payments.
‘It's been our policy for 35 years,’ says CalHFA Marketing Director Ken Giebel. ‘It says very clearly when we finance the loan that the homeowner cannot convert the home to a rental property.’