Changes are coming to the California Dream For All Shared Appreciation loan program one year after its debut in hopes of reaching a more diverse group of potential home buyers statewide.
The program, designed to help first-time homebuyers with down payments, quickly ran out of the $300 million set aside to help with down payment assistance in just 11 days last year. While the program was widely popular, some realtors and lenders reported that clients who received the funds were already far along in the home-buying process. The reports fueled speculation that those who received the funds could already afford homes, Cal Matters reported.
However, this time, officials with the California Finance Housing Agency, the organization that runs the loan program, hope to have more money to help buyers with down payment assistance.
The agency will also replace its original first-come, first-served model with a new lottery system to better handle the huge influx of people eager to participate in the program.
Prospective home buyers have until April to find a state-approved lender and start working on the application. The lottery opens in early April and between 1,700 and 2,000 lucky winners will receive a voucher that they have 60 days to use, Cal Matters reported.
The application website will close in May and officials will review the forms to select the lucky few, according to Johnson.
The requirements, such as being a first-time homebuyer and using the property as a primary residence, haven’t changed. However, income limits, which vary by county, changed to 120% of Area Median Income, down from 150%
The maximum Dream For All loan amount is $150,000.
“CalHFA wants to ensure that this round of funding is distributed as equitably as possible and to make sure that there is plenty of time for potential homebuyers to learn about the program, work with a mortgage professional, and submit their applications,” Eric Johnson, spokesperson for California Finance Housing Agency, told KTLA.
The agency will set aside vouchers for each region of the state based on its share of the state’s households to avoid complications that arose last year when home buyers in counties like Los Angeles only received 9% of the loans, as opposed to Sacramento County which received 25% of the loans, Cal Matters reported.
Those who take advantage of the program must repay the original down payment loan plus a portion of the home’s appreciated value if they sell or transfer the property.
With ultra-expensive housing and high interest rates, purchasing a home in California can be a challenge, but Johnson encourages prospective home buyers to keep their hopes high.
“People should not lose hope, as it’s still possible to buy your first home in California,” Johnson said.
More information about the loan program can be found on the agency’s website.
