California Dream For All Program – Program for first-homebuyers in CA

What is the California Dream for All

The California Housing Finance Agency has launched the California Dream For All program to assist low and moderate-income first-time homebuyers in buying their own homes through a Shared Appreciation Loan. The program aims to provide affordable financing to homebuyers in specific California counties, while also emphasizing responsible borrowing by offering mandatory counseling to borrowers. If you are a first-time homebuyer in a qualified California county, you can apply for the program to fulfill your homeownership dream.

Under the Dream For All program, homeowners can obtain a loan that covers 20% of the home’s purchase price. Upon repayment, the homeowner is obligated to return the initial loan amount along with 20% of any increase in the home’s value.

How to apply for California Dream For All income

To apply for the California Dream For All Shared Appreciation Loan, first make sure you meet the eligibility requirements, which include being a first-time homebuyer and demonstrating financial need.

Next, you will need to find an eligible lender who works with CalHFA. The CalHFA website has a list of lenders who are authorized to offer the California Dream For All Shared Appreciation Loan program.

Once you have selected your lender, you will need to complete a loan application and provide financial and personal information for review. 

Documents to be prepared when contacting a loan officer:

• Pay stubs
• Bank statements
• Employment history
• Previous tax returns

The lender will assess your eligibility for the program based on your credit score, income, and other financial factors.

If eligible, you will work with the lender to determine the loan amount and other details of the application. After acceptance of the offer, you will be underwritten, and if all goes well, you will receive the funds for you to purchase your home.

Overall, the application process for the California Dream For All Shared Appreciation Loan may take several weeks to complete. However, by the end,  you would have access to special financing opportunities aimed at making home ownership more accessible to low- and moderate-income households in California.

What are the income limits for California Dream

Income limits for the California Dream For All Shared Appreciation Loan program are set at the county level, and are generally determined by the county’s median income. For instance, a family of four in one county may have a maximum limit of $147,000 annually, while a family of the same size in a different county may have a maximum limit of $131,000 each year. There may also be restrictions on loan amount and home purchase price. The specific eligibility requirements for the program in your county can be found on the CalHFA website or by contacting a CalHFA-approved lender.

California Dream For All Shared Appreciation Loan – interest rate

The interest rate for this program is technically 0% for the loan itself, where you do not pay a monthly interest on this program alone. However, you are expected to pay back the loan in full upon selling the home, or at the end of your 30 year term in the event that your home appreciates in value.

There is 1 more catch, the loan will also have an additional % fee (interest of its own type) that is part of the appreciation of the home. So as your home value increases above purchase price, the CALHFA program expects a return from the increased value of the home. 

Hope for first time home buyers, what’s the catch?

There is no catch, this program is designed to help 2,300 first-time buyers, the state intends to distribute $300 million in payment.

What are the requirements to apply for this program

Requirements for the Borrower:

• To be eligible, you must be a first-time homebuyer.
• The property must be used as the primary residence
• Borrowers under CalHFA are required to undergo two levels of homebuyer education counseling and obtain a completion certificate from an eligible homebuyer counseling organization.
•  CalHFA income limits for this California Dream For All Program.

Requirements for the Property:

• Be a single-family, one-unit residence, including approved condominium/PUDs
  • Guest houses, granny units and in-law quarters may be eligible
• Manufactured housing is permitted
• Condominiums must meet the guidelines of the first mortgage*

Frequently asked questions about California Dream For All Program

20% going to be a grant or a loan?

• It’s a loan but there is no monthly payment on it and there is no interest but instead of the interest there’s the equity share. 

Example: you are buying the house for $500 000 and 20% of $500.000 is $100.000 – it’s your loan. If in five years you are going to sell your property and it’s worth $640.000 you need to pay back the $100.000 that you originally got + 20% from your “profit” (20% from %140.000)

What happens if the property depreciates?

In this case, if the property depreciates, you will need to pay back the loan, and since you do not have equity created from it, you do not return the equity.

What happens if you never sell the house? 

Although there is no fine print on this question if you never sell the house and pay off the home in 30 years, the loan then reinstates to be paid off after the 30 year term, with appreciation.

Can “California Dream For All Program” be paired with any other programs?

No, this program can’t be paired with any other CalHFA programs.