California’s real estate market can be challenging for first-time homebuyers, but a new program called California Dream For All was launched on Monday to make the process more accessible. The program offers financial aid equal to 20% of the home’s purchase price, which can be used towards down payments and closing costs.
The program works by providing a shared appreciation loan of up to 20% of the home’s cost to first-time homebuyers in California. For instance, if you’re buying a $500,000 home, you could receive $100,000 to help with down payments and closing costs.
Once the homeowner decides to sell the property in the future, they would need to pay back the 20% assistance along with 20% of the home’s appreciation. So, if you sold your $500,000 home for $700,000 five years later, you would owe $40,000 in addition to the original loan. However, if the property does not appreciate in value, you would only pay back the original 20% loan.
The program is only available to first-time homebuyers who have never owned a home before or those who sold a home they owned three or more years ago. The borrower must also plan to live in the new property they are buying, and there are income requirements depending on the county.
In Los Angeles County, borrowers must make under $180,000 per year, and the limits vary from $159,000 to $300,000, depending on the California county. The program does not allow for non-occupant co-borrowers or co-signers.
The program is available through private loan officers, and the state has allocated about $300 million to help an estimated 2,300 homebuyers in California.
