California gives homebuyers $150,000 to buy houses
Time is running out for California homebuyers looking for down payment assistance on their first home purchase this year.
The California Dream for All Shared Appreciation loan program launched last year and quickly drew attention. In just 11 days, first-time homebuyers went through all of the $300 million available.
However, on April 3, the program opens once again, and qualifying homebuyers can score up to 20 percent off their down payment fees. The grant is available for up to $150,000 on any down payment.
All applications will be accepted in a lottery system until May.
Qualifying homeowners can apply as long as they never owned a home or owned a home three or more years ago and sold it. You also cannot be an investment property owner and must instead plan to live in the house you’re purchasing.
You’ll also have to meet the income requirements for your specific county, which are typically 120 percent or less of the area median income. One of the homebuyers must also be a first-generation homebuyer.
Last year, the California Dream For All program helped 2,182 homebuyers, and 55 percent of the group were from communities of color, the program said.
There are some further stipulations to the program, though. If a homeowner ends up selling their house, for instance, they’ll need to share a percentage of their profits. That means if your home didn’t grow in value, you’d be on the line to pay back the initial 20 percent.
Sammy Lyon, a Los Angelesbased broker at Dow Capital, said the rapid exhaustion of funds in the program last year was frustrating for many of the buyers they work with.
“We had many buyers for whom this program would have been a major life gamechanger, and they missed the funds by just a few hours,” Lyon told
Lyon also said due to the first come, first serve nature of the program, buyers could add on additional down payment funds from their own pocket, meaning many people who earned the payout didn’t necessarily need the money.
“For many of our buyers, the Dream program was the difference between homeownership and renting,” Lyon said, adding that many needy homebuyers do not necessarily meet the first-generation requirement but are still unable to make a purchase in today’s housing market.
According to Redfin, the median California home sale price was $785,600 and had increased 11.4 percent over the last year.
“I understand the sentiment behind it, though for many buyers today facing the major wage to home price gap, if their parents had bought a home years ago it does not necessarily mean they can help their kids with purchasing,” Lyon said. “Some of our clients actually helped their immigrant parents purchase by co-signing for them, and now that they want to buy, they would be disqualified from this program.”
The few buyers Lyon worked with under the Dream program had already submitted a full loan application and could convert it into a program loan immediately.
“These were buyers who were already out looking at houses consistently, and comfortable making offers quickly on something that they liked,” Lyon said. “Anyone who had just reached out when it went live did not have enough time to prequalify, look at houses and get an offer accepted before the funds ran out.”
Lyon expects the lottery system this year to promote more fairness in who ends up receiving the funds this year.
“What was amazing was that the Dream program opened up the imaginative possibility of homeownership for so many folks,” Lyon said.
Many residents in gentrified Los Angeles neighborhoods are only able to stay in their homes through homeownership since rents can quickly skyrocket and price out a multigenerational
Los Angeles family, Lyon added.
“The ability to own in an expensive city is a huge benefit in terms of being able to stay in your home long term,” Lyon said. “And the generational wealth that is built through homeownership is worth the trade of shared appreciation, if it’s the only way to get into a first home.”