Good news for people who dream of buying or expanding their homes. Now first-time homebuyers and accessory dwelling units are again eligible for grant programs. The California Housing Finance Agency has reinstated the California Dream for All and ADU grant programs. So, let’s take a look at the latest California Dream for All news. And find out who can apply for a grant.
What do we know now?
The California Housing Finance Agency said it will provide information on how to apply for Dream for All Shared Appreciation Loans in the fall. Already now, you can subscribe to updates by e-mail.
California Dream for All Shared Appreciation Loan
At the end of March 2023, the agency launched the California Dream for All Shared Appreciation Loan. Under this program, for the first time, homebuyers could claim 20% of the price of a home or condo. Loans instantly became popular because they did not give interest or require monthly payments.
The program was able to help approximately 2,300 people and exhausted its supply limit in just two weeks. Initially, $500 million was allocated for California Dream for All — but a budget deficit forced the program to be cut to $300 million. Now it must return 200 million in funding and provide a new round of loans.
How the program works
At the initial stage of the program, borrowers who earn less than 150% of their county’s average income could participate. Statistics show that two-thirds of the participants earned less than $125,000. The average loan size is $112,000.
- Loans for down payment and closing costs are structured like a second mortgage.
- Therefore, they do not need to repay payments from month to month.
- Interest is not charged on them, as on a regular loan.
- When the mortgage is refinanced or the house is sold, the borrower repays the original loan amount + 20% of the home’s value increase.
- If the property was sold for an amount equivalent to the purchase price, the buyer no longer has to pay an additional 20%.
- The effective interest rate equals the average annual increase in the house’s value — on average, about 5%.
One of the most essential points is that no matter how much the house rises in price, the borrower pays at most 2.5 times the original loan amount.
To qualify for a loan, borrowers must complete a homebuyer education and counseling course online or offline at the CalHFA website.
Conclusion. Finding decent funding is almost always possible
It’s unclear exactly when the California Dream for All grants will resume — but there’s always hope for the best. So far, the state is offering other options for California residents, such as the agency’s MyHome program providing up to 3.5% of the price of a home as a quiet second mortgage.
Please remember that funding is available to match any situation or need. Therefore, if you are considering buying a house, do not wait; contact the professionals for comprehensive advice. At LBC Mortgage, we have specialized in fundraising for 15 years — sign up for a consultation to discover your home-buying opportunities!
