Get 20% in Down Payment and Closing Costs Assistance

ADVICE Josh Taylor. October 29, 2024

Are you dreaming of owning your own home in California but struggling to come up with the down payment and closing costs? Well, fear not, because the California Dream For All Shared Appreciation Loan Program is here!

This program offers up to 20% of the purchase price to help you cover those pesky upfront costs, all in exchange for a share of your home's future appreciation. That's right, if your home increases in value, the program will share in the profits.

But as with any financial product, there are some things you should keep in mind. On the plus side, you won't have to make any interest or monthly payments until you sell the home or pay off the loan. Plus, this program can be a game-changer for those who are struggling to make homeownership a reality.

However, there are some limitations to the program. It's only available in certain areas and has income limits, so not everyone will qualify. Additionally, you'll have to share a portion of your home's appreciation with the program when you sell or pay off the loan. And if your home loses value, you could end up owing more than it's worth.

So, before jumping in, it's important to weigh the potential benefits against the potential risks with a professional to make an informed decision. And if you do decide to go for it, here are the eligibility and qualifying criteria you'll need to meet:

You must be a first-time homebuyer (meaning you haven't owned a home in the last 3 years)
You need a minimum credit score of 660
Your debt-to-income ratio can't exceed 45%
The property type must be a single-family home or condo
Your minimum/maximum combined loan-to-value ratio must be between 70% and 105%
Non-occupied co-signers aren't allowed
You can't exceed the county's income limit
You'll need to complete a CalHFA homebuyer education course
And lastly, a one-year home warranty is required

So there you have it, folks! With the California Dream For All Shared Appreciation Loan Program, you could be well on your way to achieving your dream of homeownership.