What happens if there is a shortage of escrow funds?

CalHFA Homeowners

What happens if there is a shortage of escrow funds?

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If your escrow account balance is less than the minimum balance required at the time of your analysis, your escrow account has a shortage of funds.

Your options are:

Repay the shortage over the next 12 months. This option is interest-free but increases your monthly payment. You do not need to contact us to choose this option; it is always done automatically.
Repay the total shortage immediately. This reduces your monthly payment by 1/12th of the amount repaid.

CalHFA does not lend money directly to consumers. CalHFA works through and uses approved private lenders to qualify consumers and to make all mortgage loans. CalHFA purchases closed loans that meet CalHFA's requirements. The fees consumers pay could be different depending on the lender and the program.

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What happens if there is a shortage of escrow funds?

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