Just Days Left to Apply for California Program That Helps Pay for Your First House

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When it rolled out last year, the California Dream for All program — a loan application for first-time home buyers — exhausted its approximately $300 million of funding within 11 days.

That prompted some changes this year for when the down payment assistance program opened again to California residents on April 3. The state has about $250 million on the table, which is expected to assist between 1,600–2,000 new applicants, said Eric Johnson, a spokesperson for the California Housing Finance Agency (CalHFA).

The program — officially called the California Dream for All Shared Appreciation Loan — is designed to have the state step into the role of a parent or grandparent in assisting their offspring buy a home.

“The program is designed to help those who may not have had the benefit of generational wealth in buying their first home,” Johnson said.

If you’re hoping to apply for the California Dream for All program in 2024, keep reading to see who is eligible, how the program has changed this year, and what you need to do. But hurry: Applications for the program officially close at 5 p.m. Pacific Time on Monday, April 29.

Jump straight to:

• How does the California Dream for All program work?
• Who is eligible to apply in 2024?

Who got the money in 2023?

While wildly popular, the California Dream for All program didn’t have the geographic reach its designers had hoped for — nor did it reach its intended demographic target, said Adam Briones, the CEO of California Community Builders, a nonprofit housing research and advocacy organization.

Briones and his team did the research that helped design the program to close the racial homeownership gap in the state. In California, nearly 37% of Black households own their homes compared to 63% of white households, according to the Public Policy Institute of California.

“The original hope of the program had been that formerly redlined communities, low-wealth communities … [would] be disproportionately supported by this program,” Briones said, “because they’ve been disproportionately held back by inequalities, both in terms of public policy and the way that our economic system works.”

“And we didn’t see that.”

The first round of California Dream For All funding helped nearly 2,200 new homeowners purchase homes. But of those, only 3% of the grantees were Black, according to CalHFA. That’s compared to 35% of white recipients, 33% Latino and 19% Asian American and Pacific Islander.

Nor were the California Dream for All funds distributed equally on a geographic basis, Briones said. A disproportionate share went to Sacramento residents, he said.

“A lot of that had to do with informal knowledge access and understanding of a large program that was going to be rolled out,” Briones said. But he cautioned, “If Californians throughout the state don’t benefit from the program, it’s going to be really hard to make the argument to voters that they should continue investing in these types of things.”

This time around, changes to the 2024 California Dream for All program are meant to address those disparities, Johnson said. Here’s what you need to know to apply.

What is the California Dream For All program, and how does it work?

Under the California Dream For All program, the state will put down up to 20% of the cost of the home, or up to $150,000.

That money does have to be repaid, just not right away. It gets repaid — without interest — when you sell the home.

However, there’s a catch. You also have to pay back 20% of any appreciation on the home’s value (which is why the program is called a Shared Appreciation Loan). So, if you buy a $600,000 home and then sell it 10 years later for $700,000, you would have to pay back the initial $120,000 down payment, along with an additional $20,000.

In December, the median price of homes in California was nearly $820,000, according to the California Association of Realtors.

“Basically, in return for an investment from the state into your down payment, when you sell the home, you should share that appreciation with the state,” Briones said, adding that the money homebuyers repay will go toward funding future California Dream for All loans.

“As an organization working to close the racial wealth gap we thought that trade-off is fair, to ensure that we can support families now and in the future.”

Applicants can apply for the California Dream for All program before it closes at 5 p.m. on Monday, April 29 at calhfa.ca.gov/dream.

Who is eligible to apply for California Dream for All?

“Who’s eligible” is where some of the program’s changes this year come into play.

Like last year, California Dream for All applicants must be California residents — who are either citizens, permanent residents or otherwise defined as a “Qualified Alien” — and first-time home buyers.

But unlike last year, at least one person on the application must also be a first-generation home buyer — meaning their parents do not currently own a home in the United States. Applicants who have ever been in foster care also qualify.

Briones said he was skeptical at first about this requirement that applicants be first-generation home buyers. But, given how quickly the money flew out the door last year, he’s now in favor of the idea.

“I do think that this is probably a needed additional step to make sure that this program truly is targeted to people that really do need the funds,” he said.

Last year, residents making up to 150% of the area’s median income could apply. But this year, that threshold has been reduced to 120% of the area median income. Those income limits now range from $287,000 in Santa Clara County to $132,000 in some of the more rural or agricultural parts of the state, such as Humboldt and Fresno counties. Check out the full list of county income limits here (PDF).

Johnson said that CalHFA (California Housing Finance Agency) relies on the income the lender uses to qualify the homebuyers. So, if, for example, a married couple applies, then the lender uses their combined income. If a single person applies to the program, the lender only uses one income.

Applicants must also have a credit score of 680 and a debt-to-income ratio of no more than 45%. Read the full list of eligibility requirements for California Dream for All (PDF).

I think I qualify for the California Dream for All program. What’s next?

Don’t start picking out your dream home just yet. Johnson said the first thing to do is to find a CalHFA-approved lender who is offering the California Dream for All program and can get you pre-approved. This is because you’ll need that pre-approval letter (PDF) from them to register for the program in April.

“Figure out how much home you can qualify for,” Johnson said. “Then work with a loan officer to make sure your application is ready.”

The online California Dream for All application portal will open at 8 a.m. on April 3 and will remain open until 5 p.m. on April 29.

After that, you’ll need to take a five- to six-hour home-buyer education course and a second one-hour course about how a shared appreciation mortgage works. You can register at calhfadreamforall.com, and the classes are online and free.

If you do end up getting selected for a loan under the program, then you have 90 days to find that dream house, enter into a contract to purchase a home and have the lender reserve the loan through CalHFA’s Mortgage Access System.

If you aren’t quite ready to talk to a loan officer yet, Johnson said you can also talk to a free HUD-approved housing counselor, who can dig into your finances and figure out what you need to do to get ready to buy a home.

What happens after I apply for California Dream for All?

This is another way the 2024 application differs from last year’s: Unlike 2023’s first round of funding, when loans were given on a first-come, first-served basis, this year, there will be a lottery.

This means you don’t need to worry about getting your application in right when the program opens up. Johnson confirmed that you will have until the end of April to submit.

After that, Johnson said CalHFA has separated the state into nine geographic zones. The number of applicants selected for the California Dream for All loans will be based on the number of households in each zone. “We really wanted to make sure these funds were distributed equitably,” he said.

“Some people didn’t have time to get their paperwork together [last year],” Johnson said. “We wanted to make sure we had done everything we possibly could and for people to get their finances in order, to make sure they could be successful this year.”

Johnson said it’s OK if the applicant makes an honest mistake or there’s an error on the application: They won’t be rejected outright. CalHFA will work with the applicant to correct any mistakes.

“We have a very robust customer service platform in place,” he said. “We help people get through the process.”

But he also said starting early to prepare for the application process is important. So, if you haven’t already, find a loan officer who can help assist you.

And, if it doesn’t happen this year, Johnson said you might also qualify for some of the state’s other home-buyer-assistance programs.

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The original version of this story published on Feb. 19, 2024.