Popular Home Buying Program Is Given $250 Million For Qualified First-Time Buyers
This spring, California is set to allocate an additional $250 million in down payment assistance to first-time homebuyers, introducing changes to its year-old initiative to attract a broader range of
applicants statewide.
In its inaugural year, the California Dream for All loan program saw eager buyers deplete its $300 million fund in just 11 days. It raised questions about the beneficiaries’ financial need for such assistance, as many were already well into the buying process.
Launched last month, the program continues its “shared appreciation” model, offering up to 20% of a home’s purchase price or $150,000 (whichever is lesser) in down payment aid. The loan and a portion of the home’s future appreciation are repayable upon resale.
The California Housing Finance Agency oversees the program and is replacing the first-come, first-served approach with a lottery system to distribute funds more equitably.
Deadline To Apply For Lottery
Applicants have until April to engage with a state-approved lender and prepare their application. The lottery, opening in early April, gives a month for submissions, with 1,700 to 2,000 winners receiving vouchers valid for 90 days towards purchasing a home.
According to CalHFA spokesperson Eric Johnson, the extended preparation period aims to assist potential buyers uncertain about their purchasing capability without state help.
Targeting steady earners with decent credit scores above 660, the program encourages prospective buyers to improve their financial standing with guidance from loan officers or brokers.
In the program’s first phase, vouchers will be distributed evenly across the state to mitigate regional disparities. Efforts focus on inclusivity, especially in high-cost areas, acknowledging the housing affordability crisis that leaves many Californians, particularly those impacted by redlining or belonging to communities with low homeownership rates, struggling to save for down payments.
New program rules mandate that at least one buyer per transaction be a first-generation homeowner, and income eligibility is adjusted to reflect financial needs across various counties better.
Outreach efforts starting in February will target potential applicants, especially in Southern California and the Central Coast, utilizing diverse media channels to spread awareness.
The initiative, spared from recent budget cuts, remains a beacon of hope for Californians aspiring to homeownership, emphasizing perseverance in the face of the state’s challenging real estate market. Interested individuals are encouraged to follow program updates and join the homebuyer email list offered by CalHFA.