First-generation homebuyers approved for California’s ‘Dream For All’ home loan program
The second round of recipients of California’s ‘Dream For All’ home loan program have been conditionally approved for vouchers from $255 million fund.
Last year, California set aside $300 million for the state’s Dream For All Shared Appreciation Loan program. The program provides potential homebuyers with vouchers for up to 20% of a home’s value to assist with the down payment and closing costs.
The vouchers in the first round were awarded on a first-come, first-serve basis and there was such a demand that within 11 days all the funding was gone. The Golden State launched a second round earlier this year, with $255 million in funding. Governor Gavin Newsom announced last week that 1,700 have now been conditionally approved for the vouchers which the California Housing Finance Agency (CalHFA) will allocate.
“As part of the state’s comprehensive efforts to improve affordability, build generational wealth, and unlock access to housing, Dream For All is paving the way home for thousands of Californians,” said Gov. Newsom in a statement. “This program is more than just financial assistance – it’s about providing a pathway for individuals to achieve their California dream.”
First-generation homebuyers approved for California’s ‘Dream For All’ home loan program
This year, the qualification requirements were tightened to focus on those whose parents do not own a home. Thus, they have not had “the opportunity to experience the various social and economic benefits that homeownership provides, such as generational wealth-building.”
Due to the extremely high demand, 18,000 first-generation Californians homebuyers applied for the California’s Dream For All home loan program, CalHFA used a random selection process. The 1,700 voucher recipients will have 90 days to find a home which they can use the Dream For All down payment assistance to purchase.
These newest beneficiaries of the home loan assistance will join the nearly 2,200 Californians that received Dream For All vouchers last year. In order to help finance the program going forward, when recipients sell or refinance, they will have to repay the initial amount of assistance along with 20% of any increase in the home’s value.
Home prices in California far surpass rest of the United States
Housing affordability in the Golden State continues to be an impediment to buying a home. Home prices in California have long been much more expensive than in the rest of the United States and have grown substantially in recent years.
According to the California Association of Realtors the median sale price for homes in the state surpassed $900,000 for the first time in April. The median home price was up nearly 6% from the month before and 11.4% year-over-year.
The price of mid-tier homes in California are over twice as expensive as the typical mid-tier home in the rest of the US. First-time homebuyers in the Golden State have more difficulty than their counterparts in the rest of the nation getting started on the housing ladder as even bottom-tier homes in the state are roughly third more expensive than a mid-tier US home.
Additionally, the California Legislative Analyst’s Office found that the median income needed to qualify for a mortgage for a bottom-tier home has been rising much faster than the median household income in the state since 2021. As of March 2024, at $140,000 it is over 50% higher than median household income in 2022.