New State Program Launched!
California's New Dream For All Program Provides Assistance to First-Time Homebuyers.
The hardest part of buying your first home is often saving for the down payment. A New California program offers homebuyers up to 20% financial assistance.
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.
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,
What is Shared Appreciation?
An arrangement in which a lender or investor agrees to provide funds to a borrower in exchange for a share of the future appreciation in the value of a property or other asset. This type of financing can be particularly appealing to borrowers who may not qualify for traditional loans.
Program Features:
- Shared appreciation loan structure
- Loan for 20% of the purchase price
- Repayment of the loan plus 20% of any appreciation in home value
- Subordinate second mortgage
- Down payment and closing cost assistance
- No monthly repayment of subordinate silent 2nd assistance loan
- Lower effective interest rate on loan (equal to the average annual appreciation in home's value)
Benefits:
- CalHFA income limits for qualifying.
- Lower monthly payment by avoiding private mortgage insurance (PMI)
- Increased buying power due to larger down payment and lower payment
- No monthly repayment until the property is sold, refinanced, or transferred
- Lower loan amount
- Greater flexibility and peace of mind for homeowners
This program has limited funds, so buyers need to act fast! Most lenders are guessing it will last for 3-4 months. What are you waiting for? Please call me with any questions, and let's connect!
