Homeownership is a crucial step towards building wealth and financial stability, but for many first-time homebuyers in California, it can seem like an unattainable dream. The California Housing Finance Agency (CalHFA) has introduced the Dream For All Shared Appreciation Loan Program to make homeownership more accessible and affordable for first-time homebuyers across the state.
What is the Dream For All Shared Appreciation Loan Program?
The Dream For All Shared Appreciation Loan Program is designed to provide first-time homebuyers with up to 20% of the home purchase price to be used for down payment and/or closing costs. This program is exclusively available through CalHFA-approved lenders and can only be used in conjunction with a Dream For All Conventional first mortgage.
One of the key benefits of this program is that it allows homebuyers to layer other non-CalHFA down payment assistance loans or grants to maximize affordability. However, the MyHome Assistance Program cannot be combined with a Dream For All Conventional first mortgage using the Shared Appreciation Loan.
Eligibility Requirements for the Dream For All Program
To qualify for the Dream For All Shared Appreciation Loan Program, homebuyers must meet several eligibility requirements:
First-Time Homebuyer Status
All borrowers, including co-borrowers, must be first-time homebuyers, meaning they have not had an ownership interest in any principal residence or resided in a home owned by a spouse during the past three years.
First-Generation Homebuyer Status
At least one borrower must be a first-generation homebuyer, defined as someone who has not been on the title, held an ownership interest, or been named on a mortgage to a home in the United States in the last 7 years, and whose parents do not have any present ownership interest in a home in the United States.
Citizenship and Residency
Borrowers must be either citizens or other Nationals of the United States, or "Qualified Aliens" as defined by law. Additionally, at least one borrower must be a current California resident.
Credit, Income, and Loan Requirements
Homebuyers must meet the credit, income, and loan requirements set by CalHFA's first mortgage loan program, the CalHFA-approved lender, CalHFA's Master Servicer, Lakeview Loan Servicing, and the mortgage insurer, as applicable.
Homebuyer Education and Shared Appreciation Loan Terms
To ensure that homebuyers are well-prepared for the responsibilities of homeownership, the Dream For All Program requires homebuyer education. In addition to the education requirements for CalHFA's Conventional Loans Program, borrowers must complete CalHFA homebuyer education specifically for Shared Appreciation loans.
The Shared Appreciation Loan terms vary based on the borrower's income level, with lower-income borrowers (those earning less than or equal to 80% of the Area Median Income) receiving more favorable terms. The program appreciation share ranges from 15% to 20% of the home price appreciation, depending on the borrower's income.
By providing first-time homebuyers with down payment assistance and the opportunity to layer additional assistance programs, the Dream For All Shared Appreciation Loan Program is making homeownership more attainable for Californians. If you're a first-time homebuyer in California, be sure to explore this program and work with a CalHFA-approved lender to see if you qualify.
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