First-Time Homebuyers Benefit from California’s Dream For All Loan Program
Buying a home in California can be a challenging task, but the California Dream For All program, launched on Monday, aims to make the process a little easier for first-time homebuyers. The program provides homebuyers with financial assistance equal to 20% of a home’s purchase price, which can be used for a downpayment and closing costs when purchasing their first home. The program offers first-time homebuyers in California a shared appreciation loan of up to 20% of the cost of the home.
For instance, if a homebuyer is purchasing a $500,000 home, they would receive 20%, or $100,000, to help with a downpayment and closing costs. When the homebuyer sells their home at a later date, they would be required to pay back the 20% assistance, plus 20% of the home’s appreciation. If the home sells in five years for $700,000, the homebuyer would owe 20% of $200,000 appreciation, which is $40,000, in addition to the original loan. However, if the home hasn’t grown in value, the homebuyer would only pay back the original 20% loan, according to the California Housing Finance Authority.
The program is open to first-time homebuyers in California, meaning those who have never owned a home. A first-time homebuyer is also someone who owned a home three or more years ago and sold it. Borrowers must also plan to live in the new property they are buying. The program does not allow for non-occupant co-borrowers or co-signers.
In addition to being a first-time homebuyer, borrowers must meet income requirements depending on their county. For instance, in Los Angeles County, borrowers must make under $180,000 per year. The limits vary depending on what California county you live in, but range from $159,000 to $300,000.
The program is offered through private loan officers, according to CalHFA. The state has allocated about $300 million toward the California Dream For All program, according to State Treasurer Fiona Ma. This will provide assistance for an estimated 2,300 homebuyers in California.