CalHFA officially announced the re-introduction of its extremely popular Dream For All Program!

    And … it is not quite as exciting this time around.

    As a quick reminder – this is probably the most generous down payment assistance program we have ever seen – and that is why the CalHFA is trying to limit it to families that truly need assistance.

    When the program was previously launched last year, it ran out of funds in 3 weeks.

    CalHFA will provide down payment assistance, up to $150,000 for homebuyers – in exchange for the repayment of the loan and a share of the appreciation when borrowers sell or refinance.

    CalHFA will take up to 20% of the appreciation if borrowers are above 80% of an area’s median income, and it will take only 15% of the appreciation if borrowers are below an area’s median income.

    These are vastly better terms than any of the shared appreciation loans offered by private funds.

    CalHFA’s Dream For All Program Restrictions

    BUT – there are many limitations, including the following:

    • All borrowers must be first-time homebuyers.
    • At least one borrower must be a “first-generation homebuyer” (no ownership interest in a home for 7 years, and parents can’t have ownership either).
    • There are strict income limits which can be found here.
    • Owner occupied only.
    • Must be pre-approved by April to be eligible.
    • There will be a lottery in May to see who gets the small amount of allocated funds.

    Here is a summary of all of the new guidelines and how the program works.

    In summary, the program remains very advantageous – but

    1. there is no rush to get pre-approved for the program.
    2. the funds will go fast; and
    3. I suspect many eligible borrowers will not be able to take advantage of the program due to its limited funding and the potentially large number of borrowers who will enter into the lottery.

    To be clear – we are not trying to discourage anyone from applying for this financing. We are, however, warning borrowers not to pin all of their homebuying hopes on this financing, as many borrowers will be disappointed if they do.

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