Hello!
California passed SB-197, which gave birth to the housing program California Dream for All. This program isn't available to apply for until 3/27/2023; however, the guidelines and details about the program have been released. You can verify all the info in my post here. This program is similar to the 10% down program CalFHA had last year. Like that previous program, this program only has a set amount of funds available.
What is the program?
Through shared appreciation, The California Housing financial Agency (CalHFA) will provide 20% down payment assistance, in the form of a silent second loan. There is not a monthly payment associated with this loan; however, should you sell, refi, or transfer ownership, you will have to repay the loan they provided to you, as well as a portion of the appreciation. This loan does not turn into a grant.
– For Example –
$500,000 purchase price.
CalHFA will give you $100,000
This amount doesn't include what you would owe through shared appreciation.
What does shared appreciation mean?
CalHFA is entitled to 15% or 20% of the appreciation gained the purchase date. Whether you pay 15% or 20% will depend on your earnings. Per the guidelines, buyers whose earnings is between 80% – 150% of your county's Area Median earnings (AMI) pay 20% of the appreciation. Most buyers are going to be within this range. If your earnings is less than 80% then CalHFA will only take 15%.
Benefits
- No down payment
- No private property loan assurance
- Lower monthly payment
- increased purchase power
Qualifications:
- First-time Homebuyer (haven't owned a property in the last 3 years)
- Minimum loan score: 660
- Maximum debt-to-earnings ratio: 45%
- Single Family home or Condo; no multifamily
- earnings can't exceed county earnings limit
- CalHFA homebuyer education course required
- One year home warranty required
Thank you 🙂
Holy cow thank you for this. Is this for real??? My wife and I meet all the qualifications for this.
This seems like a great program. I wonder what happens if you never sell the house and it gets inherited? It seems like they’re mostly anticipating first time buyers to be younger, but with the outrageous home prices I could see some older folks also being first time buyers.
Can you pay their portion of the loan out or do you always owe them appreciation?
I’m hoping people smarter than me have thought this through, my first reaction is that this is just going to increase home prices further.
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At first blush, this is a great program to give a first time homebuyer an honest chance to purchase – it is still up to the seller if they want to accept the deal, especially if there are cleaner (ie, faster closing, cash, etc) offers. I see this as a huge win overall.
So house prices will go up by 20% got it
Two questions pop up in my head…
What happens to the homeowner if there is no appreciation at time of sale? Would they owe initial 20% only back or would there be other costs too?
Secondly, is there a borrowing limit? If so is it a flat amount of formula based on DTI
I will warn people to start getting ahead of this opportunity before home prices jump up due to the influx of new buyers taking advantage of this opportunity
ALSO mortgage interest rates are high right now, if you refinance down the road when interest rates are lower then you will have to pay back the 20% and either the 15%/20% appreciation
Sounds too good to be true, so they’ll jerk up the prices even more
Is that county income limit qualification per household or individual?
Does this include financing new constructions?
THANK YOU for posting this!
holy shit
This literally doesn’t help at all. The cheapest houses in SoCal right now are around 650k. Even with a “free” 20% down the monthly payment ends up being $3,953/month (double most people’s monthly income.). The only way anyone could afford this is if they are already INCREDIBLY well off. Millennials getting fucked again by “help” that is only usable for Boomers……
Edit: even if you cut 4k in HALF to 2k that is more than or equal too what 80% of people make in a month. So still unaffordable for anyone not very rich already.
seems like this could be pretty expensive form of financing down the road? Does that 20% of the appreciation number jump out at anyone else or am I overthinking this?
It’s a bummer that the Los Angeles county income bracket is lower at $180K per household. The housing market here is so messed up, you can’t buy in the city if your HHI is $200K.
How do I actually apply? Do I do it before house hunting?
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This is great news! Unfortunately, I probably won’t be ready to buy a house for another few years. I’m happy for anyone that takes advantage of this though. We need more family homes and fewer for profit rental homes
Ah yes, let’s fix the housing supply problem by increasing demand. Surely that’ll help people find housing!
I’m at around 150k in savings right now. I wonder if I’m allowed to borrow this 20% and use my 150k for a huge down payment to lower the mortgage!
Too bad the lowest home price in my area is like 700K and the mortgage with a 20% down payment is still around $4K/Month jeez
How does one apply?
It doesn’t mention about residency status. Is it applicable to only permanent resident of CA?
This will push housing demand and increase house price, then more property tax will be collected
It’s gonna be crazy hard to get it though, they only have enough funds to do around 2,300 homes iirc
Just an FYI Cal HFA has had multiple down payment assistance programs for years now. To find approved lenders that offer them you’ll go on their website.
Where does the money come from?
No one making $235k can afford the mortgage on a $1million house at current rates unless you go crazy.
Also what happens if property values go down and you need to sell? Suddenly you are underwater and either can’t sell or need to make up potentially a lot of money.
California will *loan first-time home buyer 20% down. This isn’t a grant, it’s a loan that will eventually need to be paid back plus some
Is there any kind of repayment scheme for those that DO NOT sell or refinance their homes? If I live in the home for the rest of my life does this mean that I never have to pay anything towards this program?
Not sure what the OP’s angle is here but everyone should probably be aware that the entire post history consists of spamming this and some other story, and commenting on a post this information seems to be lifted from, since they’re PMing people “resources” https://reddit.com/r/bayarea/comments/11qp27i/california_dream_for_all_california_will_give/
Tax payer money being used to prop up a bubble.
Creating a nice exit ramp for the elites.
That’s actually so corrupt
I was excited about this program at first, but after talking with multiple LO, it’s actually not that great
1. The actually details of this program are actually not finalized until 27th this month.
2. Interest rate for this program will actually be higher than your usual 30 year conventional
3. There’s only couple hundreds of million dollars / year, not that many people will get it
4. You actually have to get a deal accepted before you can apply to this program, government won’t approve you first for you to find one. So it might make you make rash decisions.
5. In prior years, such programs usually are very limited in criteria so people can usually get their money within 30 days. But some are telling me the closing date can take a lot longer since the demand is likely gonna be high. And as you can guess, government workers probably won’t work faster.
Refi triggering repayment kills it for me.
Think twice about the government becoming an equity investor in your primary residence.
Yeah- I believe it’s only 3000 of these loans going out per year
So housing prices going up 20% soon?
Haven’t read the details in the entirely but I can see two ways of screwing the state or the homebuyer (especially in this current market). Please correct me if I am wrong.
1st. Interest rates are going up to curb inflation (if you take a loan then this is bad). Market was expecting a 1/2 of a % rate increase this week leading to the mid 5%’s interest rates. Due to banks going through turmoil, they raised it by 1/4 of a % so half of what was expected. Some people were expecting no increase to settle the markets but the Fed’s main goal is to curb inflation. I would personally wouldn’t take out any loan at this point in time and would rather buy in cash.
2nd. Fellow homeowners like myself are seeing how much more we can sell our properties once this goes into effect. Government is subsidizing home purchases so we can charge more an make more as there is more liquidity and every seller will try to get as much as they can get.
Hope people get their dream home but many moving parts to consider. Will have to coordinate with legal and others with more knowledge. Good luck everyone.
Awesome. More people can now afford to buy the few homes that are available. This solves nothing long term. Build more goddamn affordable homes with assinine HOA and Melo Roos