The California Dream For All Shared Appreciation Loan Program is a groundbreaking initiative to support first-generation homebuyers in California. This program is designed to make homeownership more accessible by offering up to 20% assistance for down payment or closing costs, capped at $150,000. Unlike many other loan programs, it uses a randomized drawing system for voucher distribution, ensuring an equitable opportunity for all registrants.
Eligibility Criteria
- First-Generation Homebuyer: At least one borrower must be a first-generation homebuyer.
- First-Time Homebuyers: All borrowers participating in the program must buy a home for the first time.
- Income Limits: Applicants’ income must align with the California Housing Finance Agency (CalHFA) Income Limits specific to the county where the property is being purchased. (Los Angeles . . . . . . . . $155,000)
Application Process
- Engage with a CalHFA-Approved Lender: The first step is to find a lender who participates in the Dream For All program.
- Obtain DFA Lender Pre-Approval Letter: Work closely with your loan officer to get pre-approved. This pre-approval letter is necessary to register for a DFA voucher in April.
- Educational Course: Applicants must complete a 1-hour online educational course about shared appreciation and its impact on mortgage repayment.
- Document Preparation: Gather necessary documents, including government IDs, proof of current address, and foster care documentation if applicable.
- Registration for Updates: It is advisable to sign up for the program’s e-news for regular updates.
Understanding Shared Appreciation
Shared Appreciation Concept
Shared Appreciation is a unique aspect of this loan program. In this arrangement, the borrower agrees to pay back the loan amount plus a percentage of the home’s appreciation value.
Examples
- Moderate Income Homebuyers: The loan covers 20% of the home purchase price for these borrowers. Repayment includes the original loan plus 20% of the home’s appreciation.
- Borrowers with Income ≤ 80% AMI: In this case, the program appreciation share is adjusted to 0.75 times the loan amount as a percentage of the home value. The loan still covers 20% of the purchase price, but repayment is the original loan amount plus 15% of the home’s appreciation.
Deadlines and Further Steps
Prospective buyers should note the importance of the April deadline for voucher registration and ensure that they complete all necessary steps, including obtaining a pre-approval letter and completing the educational course, well before this deadline.
The California Dream For All Shared Appreciation Loan Program offers a unique opportunity for first-generation and first-time homebuyers to realize their dream of homeownership. Its innovative approach in assisting with down payments and closing costs, coupled with the shared appreciation model, makes it an attractive option for eligible Californians.