CalHFA Dream for All Appreciation Program

CalHFA Dream for All, the agency's most aggressive program yet to assist first-time homebuyers, was launched on March 27th. First-time homebuyers can use the Dream for All Shared Appreciation Loan for the down payment and/or closing costs in conjunction with the Dream for All Conventional first mortgage. When the home is sold, refinanced, or transferred, the homebuyer repays the down payment loan plus a share of the appreciation in value.

Who qualifies as a first-time homebuyer?

You may be surprised to know who qualifies as a first-time homebuyer. First-time homebuyers are those who have not owned and occupied their own home in the past three years. If you have never owned a home, you are, of course, a first-time homebuyer. Likewise, if you sold your home three or more years ago, you are back to being a first-time homebuyer again, and you can take advantage of all CalHFA's first-time homebuyer programs.

How does the CalHFA Dream for All Appreciation Program work?

– The Dream for All Shared Appreciation program provides a loan for 20% of the home purchase price with no payments required.

– The homeowner pays back the original loan amount plus 15% to 20% (depending on income level) of any appreciation in the home's value when sold, refinanced, or transferred.

– Income limits to use this program vary by county ($282k maximum for Contra Costa County).

- No specific loan limits, CalHFA follows the Fannie Home Ready loan limits.

- The loan can be used towards a down payment and closing costs (up to 5%).

- If the entire 20% is used towards the down payment no private mortgage insurance is required.

- As there is no payment required, it is not included in the borrower's debt-to-income (DTI) ratio.

What are the requirements?

- Be a first-time homebuyer.

- Occupy the property as your primary residence within 60 days of closing.

- The property must be a single-family, one-unit residence. Manufactured housing is permitted.

- Meet CalHFA income limits.

- CalHFA requires a minimum credit score of 660 to 680 depending on income level.

- CalHFA borrowers must complete two levels of homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.

- CalHFA Dream for All funding must be paired with CalHFA’s Conventional First Loan.

Here’s an example of the program in action…

Bottom line

Take the time to consult with a loan officer who has been approved and trained by CalHFA to understand the specific terms and requirements. It could be the program you need to help you get into your first home!


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