California has begun a down payment assistance program, but time is running out for first-time homebuyers there to lock in up to $150,000 in down payment assistance.
The state’s revived Dream For All Shared Appreciation Loan Program (DFA) is open for a limited 20-day window from Feb. 24 through March 16.
The program, sponsored by the California Housing Finance Agency (CalHFA), offers eligible first-time buyers either 20% of a home’s purchase price or up to $150,000 — whichever is less — to help cover the down payment or closing costs.
In high-cost coastal markets such as San Francisco and Los Angeles, where median home prices often top $1 million, that could mean the full $150,000 toward a down payment.
Could Equal Entire Down Payment
The New York Post noted that on a $750,000 home, 20% equals $150,000 and that means a qualifying buyer could potentially put down 20% with little to no money saved for the down payment itself.
The assistance is unlike a traditional grant and is structured as a shared appreciation loan.
According to the report, borrowers repay the original loan amount when they sell or refinance the home — plus 15% to 20% of the home’s appreciation. Those returns are then recycled back into the program to help future buyers, the Post said.
The newspaper said that the program is not first-come first served. It operates on a lottery system and that interested buyers first must register for a voucher, and a randomized drawing will determine who receives one.
Who’s eligible?
- At least one borrower must be a first-generation homebuyer
- All borrowers must be first-time homebuyers
- At least one borrower must be a current California resident
- Household income must fall within CalHFA income limits for the county where the home is being purchased
- Buyer must obtain a DFA Lender Pre-Approval Letter before registering
The Post said that prospective buyers who meet the eligibility criteria would need to contact a CalHFA-approved lender offering the Dream For All program to secure a pre-approval letter, which is a required step before registering for the voucher drawing.
Applicants must also complete a free, one-hour online education course that explains how shared appreciation works and how it affects long-term repayment.
