Last spring, the California Housing Finance Agency rolled out the Dream for All shared appreciation program for first time homebuyers. It was such an excellent initiative that its $300 million budget was used up in just 11 DAYS, leaving many hopeful buyers left out.
What made it such an enticing program? CalHFA offered first-time homebuyers (those who had not owned within the past three years) a zero-interest, zero-monthly payment loan of up to 20% of the purchase price to pair with an 80% conventional loan on a home. The buyer(s) also had to occupy the home as a primary residence. Upon sale of the home, the 20% loan would be paid back in full, and CalHFA would take 20% of the appreciation in the home to put back into the program.
Example: A first time homebuyer purchases their $500,000 home with a $400,000 conventional loan and a $100,000 CalHFA zero-interest loan. They only pay for closing costs. After living in the house for several years, they put it up for sale. If they sell it for $640,000, CalHFA will receive $128,000 of the proceeds {$100k loan paid back + (20% x $140,000)}. Given the financial benefits of homeownership, Dream for All was a no-brainer for Californians, which explains why it ran out of money so quickly.
This year, Dream for All is back, but with slightly different rules:
· $225 million will be allotted instead of $300 million
· Applicants for the voucher will be selected via a lottery, instead of first-come, first-serve basis
· Buyers will have to be not only first-time buyers, but also first-generation buyers – their parents cannot be current homeowners (there is an exception if you grew up in foster care)
If you are a first-time, first-gen homebuyer, do NOT hesitate to throw your name into the hat. FACT: Homeowners are 40x richer than renters! Start investing in generational wealth in this year! Message me for more details and questions about this program, the only of its kind in California.