I’m sure many of you have already heard: the California Dream for All (a shared appreciation program) is back. It’s a downpayment assistance program for properties in California only. Last year, the state of California offered $200 million, and now there is another $20 million that is coming out soon.
Here’s What We Know Right Now
We know that there is going to be a lottery system. The way this is going to work: anyone who is interested is going to connect with their favorite loan officer (I’m here to help!). We’re going to pre-approve you for the program. Then, there is going to be an issuance of a pre-approval letter, which is provided to the homebuyers who will upload it to the CalHFA website (when the website is available, likely in April).
We know that the program is for first-time homebuyers – specifically first-generation homeowners. This means that the buyers are going to have to certify that mom & dad don’t own a house. At least one borrower needs to fit this category. So, if one has parents with a house and the other doesn’t, then that’s ok.
Looking at the Math
Some quick math: the maximum grant is $150,000 and it’s for 20% down. You can see that it’s going to be roughly a $700,000 house for 20% down. In some areas, it will be lower. If we do the math: $220 million divided by $150,000 means that just under 1500 people will be able to take advantage of this program. I’m assuming that there are going to be tens of thousands of people who want it.
Keep in mind that there are pros and cons. It’s called a shared appreciation program because when you pay back the 20%, you need to also pay 20% on the appreciation of the house. Unless you start to see a really big appreciation, it is going to be difficult to refinance out of the loan without a huge increase in your payment.
Is This Program Right for You?
We’re going to be talking to everyone to explain that this is a great program and can be very helpful if you get the chance to use it. But it is going to be like winning the lottery, but with a little better odds. It appears that there will be a lot of people with their names in the hat for this program.
So, look at other possibilities as well. The reality is that the majority of people who want to use this program will not get the opportunity. The lottery/drawing will be happening in April.
If you are interested or know someone who would like more information, then I’m more than happy to help. Franklin Loan Center is an approved lender for CalHFA, including other down-payment assistance programs that are available. Reach out if you have questions or would like to learn more information!