After last year’s budget of $300 million in down payment assistance was devoured in 11 days, California has relaunched its program with stricter guidelines to target a niche group of first-time homebuyers.
In its second year, the California Housing Finance Agency’s Dream For All Shared Appreciation Loan program will continue to award down payments that don’t have to be repaid until the property is sold, refinanced, transferred or paid off. Whether or not you are chosen for a loan will be based purely on luck — and your parents.
Last year, the CalHFA dished out money on a first-come, first-served basis to people who had not owned a home in the past three years, among other requirements.
This time, aspiring homeowners must match the state’s description of a first-generation homebuyer to qualify. A lucky bunch of borrowers will pull from a slightly lesser pot of $220 million for their new home.
Spokesman Eric Johnson with the CalHFA said between 1,600 and 2,000 loans will be awarded this round.
With the multi-million dollar budget came strict instructions from the state legislature to limit this year’s loans to first-generation homebuyers. This ensures the program’s funds are distributed equitably, Johnson told The Sacramento Bee on Wednesday afternoon in a phone interview.
According to the CalHFA, a first-generation homebuyer is classified as someone who has not owned a home in the past seven years and whose parents do not currently own a home in the U.S. or at the time of their death.
People who were placed in foster care would also qualify.
When the new guidelines were announced, many people had questions about whether or not someone would be eligible to apply if only one of their parents is a homeowner.
Johnson made it clear: Neither parent (biological or adoptive) should be a homeowner.
A “rigorous audit process” will be used to verify if an applicant’s parents are homeowners or not, but Johnson said the details haven’t been ironed out yet.
“Don’t give up hope,” he added “it’s still possible to buy your first home in California.”
The application portal opens in April and will close sometime later in the month or in early May. Then, CalFHA will determine if applicants meet the requirements of the program before winners are pulled.
“It won’t be like the lottery with big number balls coming out of the chute,” Johnson said, adding the picking system will include a digitally randomized component.
An audit firm will make sure the process is “completely random and fair” he said.
The maximum shared appreciation loan is capped at $150,000 or 20% of the sales price or the property’s estimated value, whichever is less, according to the state housing finance department.
Johnson said borrowers will have 90 days to find a home once they’re picked from the lottery.
Am I eligible to apply to California’s Dream For All loan program?
California’s Dream For All Shared Appreciation Loan program is geared toward first-generation homebuyers interested in purchasing an “owner-occupied property” in California, according to the CalHFA. Meaning you don’t plan to rent it out.
To qualify, your income must be less than or equal to the program’s limit for your county. For example, residents of Sacramento, Placer, Yolo and El Dorado counties who make more than $180,000 a year are not eligible to participate in the lottery.
According to CalHFA, each borrower must:
▪ Be a first-time homebuyer
▪ Be a U.S. citizen or a qualified resident
▪ Meet financial and loan requirements
At least one borrower must:
▪ Meet the state’s definition of a first-generation homebuyer
▪ Be a current resident of California
This story was originally published January 26, 2024, 9:04 AM.