In a positive development for prospective first-time homebuyers in California, there is some good news. If you find yourself in need of additional support for your down payment, help is available.
The California Dream For All Shared Appreciation loan program has been relaunched, according to an announcement by the state. The program, which was initially introduced last year, proved to be extremely popular, with the $300 million allocated to assist first-time homebuyers running out in just 11 days.
The program, facilitated by the California Housing Finance Agency, offers eligible individuals a 20% contribution towards the cost of their home, specifically aimed at assisting with the down payment. There have been some notable changes to the program this year.
In an effort to efficiently manage the anticipated influx of applications, the program has been designed to operate on a first-come, first-serve lottery system. Now, let’s take a closer look at how it operates.
The lottery is set to open in April, although the exact date is yet to be announced. Applicants will need to act quickly, as the application website is scheduled to close in May.
According to Cal Matters, a total of 1,700 to 2,000 individuals will be selected to receive the voucher. The voucher will have to be utilized within a period of 60 days.
According to CalHFA, individuals who have never owned a home or who owned a home three or more years ago and sold it are eligible to apply. It is important to note that living in the home you are purchasing should be part of your plan.
Prospective homebuyers are required to collaborate with lenders approved by the state and fulfill specific income criteria, which differ based on the county. Currently, the income requirements have been lowered to 120% of the area median income. In the previous year, the percentage stood at 150%.
When a homeowner decides to sell their house, a percentage of the appreciation will be returned to the state. The exact percentage depends on the homeowner’s income, ranging from 15% to 20%. This money will then be utilized to assist future first-time homebuyers.
According to the CalHFA, homeowners who wish to sell their homes without any increase in value would need to repay the initial 20% loan.
According to the program’s website, the California Dream For All program has successfully assisted 2,182 new homeowners in purchasing a home. Of these homeowners, 55% self-identify as belonging to communities of color.
