California's $250 Million Assistance Program Open for First-Time Homebuyers with Up to $150K in Aid
Great news for Californians who want to own their first home! You can now apply for the state’s Down Payment Assistance Program, Dream For All. Designed to help first-time homebuyers, the program has a whopping $250 million available this year, per Fox 5. If you qualify, you can get up to $150,000 to buy your home. So, if you have been thinking about becoming a homeowner, now is the time to take a look.
Eligibility criteria
To qualify for the down payment assistance program, there are a few requirements, per KTLA News:
1. You and any co-borrowers must be first-time homebuyers, meaning you have not owned a property or lived in a house owned by your spouse in the last three years.
2. At least one person participating in the purchase must be a first-generation homebuyer, meaning their parents do not own a home in the United States.
3. All applicants need to be residents of California.
4. You must plan to live in the home as your main residence.
5. Your income should be under the limit set for your county in California.
6. You need to have a credit score of 680 or higher and a debt-to-income ratio of no more than 45%.
7. If you've ever been in foster care, you're eligible for the program too.
Make sure you meet these criteria before applying for the assistance program.
Here's how the program works
The program will offer a loan of up to 20% of the purchase price of a home, with a maximum of $150,000. The funds can be used to cover down payments, closing costs, and first-time mortgages. For example, if you buy a $500,000 home, you will get 20%, or $100,000, to cover the down payment and closing costs. If you sell the house in the future, the 20% loan will have to be repaid along with 20% of the appraised value of the house.
For example, if a $500,000 home sells for $700,000, it goes up $200,000. You would pay 20% of that, or $40,000, in addition to the original loan. If you sell your home and it hasn’t appreciated, you only have to pay the first 20% of the loan. There are special rules for people whose income is 80% or less of the local median. In this case, you will only need to pay back 15% of any increase in the value of the home, plus the original loan. To check if your income qualifies, use the HomeReady Lookup Tool.
What is the application process?
Here's all you need to know about applying for the Dream for All program:
- Online submissions are accepted from April 3 to 5 PM, April 29.
- Winners will be chosen at random via lottery, rather than on a first-come, first-served basis, as was the case in 2023.
- All borrowers must complete homebuyer education counseling and receive a certificate from a recognized homebuyer counseling agency.
- Potential applicants should contact a CalHFA-approved lender offering the Dream For All program. They can assist you in determining the paperwork and information required for your application.
What next
Here's what happens if you're chosen for the Dream for All program.
- If chosen, you will have 90 days to find a property, sign a purchase contract, and have your lender reserve the loan using CalHFA's Mortgage Access System.
- If you aren't ready to speak with a loan officer, you can contact a free HUD-approved housing counselor. They can help you analyze your finances and become more prepared.
- The Dream for All initiative began in March 2023 and was a huge success, with thousands of purchasers swiftly using up the $300 million allocated for payments.
You can find online applications and more information about the California Dream For All program here. If you want to dive deeper, you can check out the program's official handbook here. And for all the documents you'll need to apply, you can find them here.
