The California Dream for All Shared Appreciation Loan Program: The Ultimate Guide

The California Dream for All Shared Appreciation Loan program has been gaining popularity among low to moderate-income homebuyers looking to take the first step toward homeownership.
Photo by Maarten van den Heuvel on Unsplash

The California Dream for All Shared Appreciation Loan program has been gaining popularity among low to moderate-income homebuyers looking to take the first step toward homeownership. With numerous calls and inquiries, we thought it would be helpful to provide a comprehensive overview of this unique loan program. So let’s dive in and discover what the California Dream for All program is, how it works, and the eligibility criteria for prospective homebuyers.

What is the California Dream for All Program?

The California Dream for All program is designed to provide financial assistance to first-time, low to moderate-income homebuyers (up to $235k family income in Orange County) by offering a shared appreciation loan. This loan covers up to 20% of the home purchase price, essentially acting as the down payment. In return, the homeowner pays back the original loan amount, plus 20% of any appreciation in the value of the home upon selling.

Here’s an example to illustrate how the program works:

Suppose you purchase a home for $500,000. The Dream for All program will cover $100,000 (20% of the purchase price), while your regular/primary mortgage would be $400,000. Later, if you sell the house for $640,000, there would be $140,000 in home price appreciation. You would then owe 20% of that appreciation ($28,000) in addition to the initial $100,000 loan, making your total Dream for All payback $128,000. Assuming your initial mortgage has been reduced to $370,000, you would have $142,000 in homeowner equity. This is an attractive return on investment, particularly when you didn’t have to come up with a down payment upfront.

Eligibility Criteria for the California Dream for All Program:

  • To qualify for the Dream for All program, you must meet the following criteria:
  • Be a first-time homebuyer, which means you haven’t owned and occupied a home within the last three years.
  • Occupy the property as your primary residence.
  • Complete two levels of homebuyer education counseling: [one quick class that’s free and another online 8-hour course for $99]
  • Meet CalHFA income limits (for example, $235,000 in Orange County).

Additionally, the property you’re purchasing must be a single-family, one-unit residence, including approved condos and PUDs. Manufactured homes are also permitted under the program.

How to Apply for the California Dream for All Program

If you’re interested in taking advantage of this program, the first step is to contact us and we can help get the process started.

Conclusion

The California Dream for All program offers a unique opportunity for first-time, low to moderate-income homebuyers to enter the housing market without the burden of a traditional down payment. By understanding the program’s ins and outs, eligibility criteria, and application process, you can make an informed decision on whether this program is right for you. Don’t hesitate to reach out to us for guidance and assistance in taking advantage of this valuable program.

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