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Monday, April 15, 2024

Another round of down payment assistance coming to California’s first-time homebuyers

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Starting in April, the second round of Dream for All, a California down payment assistance program aimed at helping individuals achieve their dream of homeownership, will resume.

The California Housing Finance Agency (CalHFA) announced that the program will begin accepting applications online in April.

Last year’s inaugural Dream for All program quickly exhausted its $300 million budget in just 11 days, approving a total of 2,100 loans.

Shalom Center Director Jee Lee discusses Dream for All with a client at the center. [Courtesy of Shalom Center]

According to the Shalom Center, a nonprofit organization, a total of 12 prospective buyers benefited from Dream for All support at the center last year, including five Korean Americans.

This year, the Dream for All program is allocated a budget of $250 million, which can support up to 1,670 loans of a maximum of $150,000 each. The funds can be utilized for down payments or closing costs, up to either 20 percent of the home’s price or appraised value, or $150,000, whichever is less.

“The Dream for All program provides loans of up to 20 percent of the purchase price of a home,” said CalHFA spokesperson Eric Johnson, “and homebuyers must repay approximately 20 percent of the home’s appreciation to the state when the home is refinanced, sold, or transferred.”

In its second iteration, Dream for All has transitioned the application process from a first-come, first-served basis to a lottery system and has tightened eligibility requirements to focus the program on those who need it most.

“The first-come, first-served application process limited the number of opportunities for those who really needed the support,” said Shalom Center President Jee Lee, adding, “The second round of the program will be based on geographic, ethnic, and income-based lotteries to ensure fairness in the selection of applicants.”

Eligible applicants are first-generation homebuyers whose parents do not own a house and first-time homebuyers who have not owned a home in the past seven years and intend to make the home their primary residence.

The annual income limit is set at 120% of the area median income, with varying limits for each county. In Los Angeles County, it’s $155,000, Orange County $202,000, San Diego County $185,000, Riverside County $149,000, and Ventura County $195,000.

Applicants have until April to complete an application through a state-approved lender. If selected, recipients will receive their voucher in May and will have 60 days to utilize it for purchasing a home.

To apply, individuals must be pre-qualified through a participating lender, who will assess their credit report and debt-to-income ratio to determine the loan size they can afford. CalHFA does not directly accept applications, so applicants must apply through an approved lender. Qualified individuals must also complete a CalHFA-approved homebuyer education counseling program and obtain a certificate of completion.

“You need to have 5 percent of the home’s price saved up, and you need to live in the home for five years before you can sell it,” said Lee. “We are expecting a large number of applicants again this year, so it pays to prepare ahead of time.”

For additional information, individuals can visit California Dream for All or contact the Shalom Center at 213-380-3700.

BY EUNYOUNG LEE, HOONSIK WOO    [lee.eunyoung6@koreadaily.com]