Elgin Nelson
The California Dream for All program, introduced last year as a loan application for first-time home buyers, quickly depleted its $300 million funding within 11 days. This new initiative, known officially as the California Dream for All Shared Appreciation Loan, adjustments have been made in anticipation of the reopening of the down payment assistance program for California residents in the first week of April.
Responding to the high demand and lessons learned from the previous year, modifications have been implemented for the upcoming round of the down payment assistance program. The state allocates approximately $250 million, projected to aid 1,600–2,000 new applicants in the first week of April. Eric Johnson, a spokesperson for the California Housing Finance Agency (CalHFA), likens the program to the state playing a supportive role in helping individuals purchase homes.
“This [the program] was designed to help those who may not have had the benefit of generational wealth in buying their first home,” he said.
To help close the racial homeownership gap in California, the program was designed to help address the fact that there are only 37% of Black households who own homes compared to 63% of white households. The initial round last year assisted nearly 2,200 new homeowners, but only 3% of the recipients were Black, contrasting with 35% white, 33% Latino, and 19% Asian American.
“The original hope of the program had been that low-wealth communities would supported by this program,” Adam Briones, CEO of California Community Builders, said. “As an organization, we are working to close the racial wealth gap, so we thought that trade-off is fair, to ensure that we can support families now and in the future.”
Under the program, the state will put down up to 20% of the cost of the home, or up to $150,000. The repayment, without interest, occurs when the home is sold. However, a catch exists: 20% of any appreciation in the home’s value must also be repaid, making it a Shared Appreciation Loan. For instance, selling a $600,000 home for $700,000 after 10 years necessitates repaying the initial $120,000 down payment and an additional $20,000.
Applicants that are eligible for the program include California residency, citizenship or permanent residency, and at least one person on the application being a first-generation home buyer. Also, applicants with a history of foster care qualify in 2024 as an alternative to the first-generation requirement.
Last year, residents with incomes up to 150% of the area’s median income were eligible; however, this year, the threshold has been reduced to 120%.
To participate, prospective home buyers need to find a CalHFA-approved lender offering the California Dream for All program and obtain pre-approval. A pre-approval letter (PDF) is required for registration in April, although the exact reopening date remains unknown.
“Figure out how much home you can qualify for,” Johnson said. “Then work with a loan officer to ensure your application is ready.”
Additionally, applicants must complete a 5- to 6-hour home-buyer education course and a separate 1-hour course on shared appreciation mortgages.
Registration for these courses is available at calhfadreamforall.com, both online and free. In case eligibility is not met this year, Johnson suggests exploring other home-buyer assistance programs offered by the state.