WHAT IS THE CALIFORNIA DREAM FOR ALL PROGRAM?

 

  • California Dream for All is a new program offered by the state of California that provides first time homebuyers or anyone who has not owned a home in the past 3 years with down payment money toward their home. Homebuyers receive a shared appreciation loan to help them reach a down payment of at least 20% of their home’s purchase price. This California housing program both reduces the primary mortgage loan and helps homebuyers avoid private mortgage insurance and higher interest rates.
  • 20% down payment assistance is in the form of a silent second loan.
  • The Dream For All home loan and assistance program is another example of how the state of California is helping homebuyers gain access to affordable financing, increase homeownership, and create generational wealth.

 

BENEFITS OF THE CALIFORNIA DREAM FOR ALL ASSISTANCE PROGRAM:

  • Lower monthly payment because you avoid paying private mortgage insurance (PMI)
  • Lower monthly payment due to lower loan amount
  • Increased buying power due to larger down payment and lower payment
  • No monthly repayment of the subordinate silent 2nd assistance loan
  • Homeowner doesn’t repay until they sell, refinance or transfer the property

 

 

REPAYMENT OF THE DREAM FOR ALL ASSISTANCE LOAN

  • Upon sale, transfer of the home, or if the borrower refinances, the homebuyer will repay the original down payment loan, plus a share or percentage of the home appreciation

 

 

WHAT DOES SHARED APPRECIATION MEAN?

  • Shared appreciation (or shared equity) just means that since the California State Housing Finance Agency is investing (partnering) in your ability to purchase a home that will build generational wealth for you, that you will split or share a small percentage of the increase in the value of the home when you sell, transfer ownership, or refinance

 

HOW MUCH APPRECIATION IS ‘SPLIT OR ‘SHARED’?

  • The percentage of appreciation that is split or shared with the state housing authority when you sell or refinance depends on what your income is:
  • 80%/20% Split = Borrowers with income between 80% to 150% of the AMI keep 80% of the home appreciation
  • 85%/15% Split = Borrowers with income under 80% AMI keep 85% of the home appreciation

 

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FREQUENTLY ASKED QUESTIONS:

 

 

QUESTION: WHAT IS A SHARED APPRECIATION LOAN?

 

Answer: Unlike a traditional loan, a shared appreciation loan is paid back upon the sale of the home or refinance of the loan. The amount you pay back is based on the amount your home changes in value.

 

 

QUESTION: WHO QUALIFIES FOR THIS PROGRAM?

 

Answer: Low-and moderate-income (LMI) first-time California homebuyers are eligible for the program. Exact requirements are still being finalized and should be released soon!

 

 

QUESTION: WHY DOES THIS PROGRAM EXIST?

 

Answer: The ability to afford a home is slipping farther out of reach for many working Californians. Accessing homeownership and making a large down payment is often even more difficult for low-income communities. The median home price in California reached $786,000 last year. For that price, a 20 percent down payment would be more than $157,000, which isn’t attainable for many low- to moderate-income first-time homebuyers. To help secure the future of California, the state is using some of its budget surplus to help struggling home buyers with this program.