For today's column, we have another insightful look at the local real estate industry by Kay Bates...Enjoy.

Cheers, JR

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In the March 2023 article, I noted that CALHFA (California Housing Finance Agency) would

release the DREAM For All assistance program. CalHFA's Dream For All Shared Appreciation

Loan program offers financing options for low and moderate-income Californians to purchase

their first homes. The program made $300 million in funding available, which is expected to

assist over 2300 Californians in achieving homeownership. This is all Good News! This

program went into effect March 27th. However, “CalHFA had to pause the program as all funds

available for the Dream for All Shared Appreciation Loan were committed as of April 10.

Gone! Gone! This was an eye opener for most lenders and Realtors. I remain positive and

hopeful that more funds will be provided. This tells us that there are lots of buyers in the

marketplace!

If you are a first-time home buyer, call your lender NOW to qualify for this program. It will be

back. In addition to meeting the income requirements, one stipulation of the program was

that applicants needed to take a homebuyer education course and secure a certificate of

completion before being approved—to say nothing of the actual homebuying process, which is

time- and research-intensive.

While the Dream for All program will provide an estimated 2,300 low- and moderate-income

Californians with a 20% down payment loan free of interest, it is not without a catch. The

down payment assistance loan—which most applicants would use on top of a primary bank

loan—must eventually be repaid to the state. And the Dream For All loan is a “shared

appreciation loan,” which means that at the time borrowers pay back the amount that the

state lent them, they must also pay back a percentage of the home’s growth in value—between

15%-20% depending on the borrower’s income level and how much they initially borrowed.

Here’s a simple example: A moderate-income borrower receives a 20% Dream for All loan on

a home that costs $100,000. The loan from the state would be $20,000, and their primary

loan would be $80,000. When that borrower pays off the full $80,000 of their primary loan,

their home has appreciated in value and is worth $200,000. At that time, the borrower would

be required to pay back $20,000 to the state, plus 20% of the appreciated value. Since the

home is now worth $100,000 more than what they paid for it, they would be required to pay

an additional $20,000 on top of the $20,000 loan amount—for a total of $40,000.

The California Housing Finance Agency has proposed that this program will be able to largely

fund itself, and the proceeds made through home appreciation percentages will be used to

help future California homebuyers get a house of their own.

Due to the high cost of housing in California—especially in areas such as the Bay Area and

Southern California—many residents of the state may be able to afford a monthly mortgage

payment but unable to save up a 20% down payment to get through the door.

Be ready for the next time...

Last Week's Poll Results: "Have You, Or Your Business, Been Affected By The Congestion On Highway 78?"