The hardest part of buying your first home is often saving for the downpayment. A New California program offers homebuyers up to 20% financial assistance.
Kayla Galloway | Contributor
Buying a home in California is not an easy task, but a new state program launched Monday for first-time homebuyers aims to make the process a little easier. The California Dream For All program provides homebuyers with financial assistance equal to 20% of a home’s purchase price. Those funds can be used for a downpayment and closing costs when purchasing your first home.
How Does the California Dream For All Program Work?
The program offers first-time homebuyers in California a shared appreciation loan of up to 20% of the cost of the home. If you’re buying a $500,000 home, you’d receive 20%, or $100,000, to help with a downpayment and closing costs. Once the homebuyer sells their home at a later date, they would be required to pay back the 20% assistance, plus 20% of the home’s appreciation. If your $500,000 home sells in five years for $700,000, you’d owe 20% of $200,000 appreciation — or $40,000 — in addition to the original loan. If you sell your home and it hasn’t grown in value, you’d only pay back the original 20% loan, according to the California Housing Finance Authority.
Who is Eligible?
This program is open to first-time homebuyers in California — meaning you’ve never owned a home. A first-time homebuyer is also someone who owned a home three or more years ago and sold it, according to the CalHFA. Borrowers must also plan to live in the new property they are buying. The program does not allow for non-occupant co-borrowers or co-signers. In addition to being a first-time homebuyer, borrowers must meet income requirements depending on their county. In Los Angeles County, borrowers must make under $180,000 per year. The limits vary depending on what California county you live in, but range from $159,000 to $300,000.
How To Apply for the Dream For All Shared Appreciation Loan
The program is offered through private loan officers, according to CalHFA.
How Much Money is Available?
The state has allocated about $300 million toward the California Dream For All program, according to State Treasurer Fiona Ma. This will provide assistance for an estimated 2,300 homebuyers in California.
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