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Real-estate professionals raise complaints about CHFA/PMI disclosure and 'bait-and-switch' financing

Consumer Protection Department Committee · November 5, 2025

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Summary

Members and staff discussed complaints that lenders or agents are omitting CHFA designation on prequalification letters or MLS forms, listing loans as 'conventional' or 'PMI' and later delivering CHFA-related commitments with additional conditions. Members characterized the practice as a "bait-and-switch" that can put sellers' deposits at risk.

Real-estate professionals and committee members described a pattern of transactions in which CHFA-linked loans (loans guaranteed through CHFA programs) appear on forms or preapproval letters as "conventional" or simply "PMI," leading buyers and sellers to believe the deal is conventional until later stipulations tied to CHFA underwriting…

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