Homeownership has long been a cornerstone for families to build and pass on intergenerational wealth. Recognizing the importance of equitable access to this opportunity, CalHFA is proud to introduce the Dream For All Shared Appreciation Loan Program. This initiative aims to empower Californians, particularly first-time homebuyers, in achieving their dreams of owning a home.
Program Highlights:
1. Accessible Down Payment Assistance: The Dream For All Shared Appreciation Loan offers eligible first-time homebuyers up to 20% of the home purchase price for down payment and/or closing costs. This assistance is available exclusively with a Dream For All Conventional first mortgage.
2. Layering Opportunities: Qualified homebuyers have the flexibility to layer other non-CalHFA down payment assistance loans or grants to maximize affordability. However, the MyHome Assistance Program cannot be combined with a Dream For All Conventional first mortgage using the Shared Appreciation Loan.
3. Eligibility Criteria:
- Applicants must be first-time homebuyers purchasing an owner-occupied property anywhere in California.
- Borrowers must meet specific requirements regarding citizenship, residency, credit, income, and loan criteria.
4. Homebuyer Education Requirement: Completion of CalHFA homebuyer education, specifically tailored for Shared Appreciation loans, is mandatory.
5. Definitions:
- First-Time Homebuyer: Defined as individuals who have not owned a principal residence or resided in a home owned by a spouse in the past three years.
- First-Generation Homebuyer: At least one borrower must meet this criterion, denoting those who haven’t had ownership interest in a home in the last seven years, among other conditions.
6. Owner Occupancy: All borrowers must occupy the property as their primary residence within sixty (60) days of closing.
7. Property Requirements: Properties must meet the criteria set by the applicable CalHFA first mortgage.
8. Underwriting & Compliance:
- The term of the Shared Appreciation Loan aligns with the CalHFA first mortgage term, not exceeding thirty (30) years.
- Repayment terms are triggered by events such as property transfer, sale, or refinance.
9. Shared Appreciation Terms:
- The program provides up to 20% down payment and shares in up to 20% of home price appreciation for borrowers above 80% Area Median Income (AMI).
- Borrowers below 80% AMI can receive up to 15% of home price appreciation.
Program Overview:
The Dream For All Shared Appreciation Loan Program provides eligible first-time homebuyers with up to 20% of the home purchase price for down payment and/or closing costs, specifically in conjunction with a Dream For All Conventional first mortgage.
Examples Illustrating Program Mechanics:
Example 1: Original Shared Appreciation Loan
- Original loan amount: $100,000
- Multiplier: 2.5
- Maximum amount due at payoff: $350,000
Example 2: 20% Shared Appreciation Loan
- Original sales price: $500,000
- Shared Appreciation Loan: $100,000
- New property value: $700,000
- Borrower owes: $140,000 (Original loan + Program Share of Appreciation)
Example 3: 20% Shared Appreciation Loan (Criteria: Borrower AMI ≤ 80%)
- Original sales price: $400,000
- Shared Appreciation Loan: $80,000
- New property value: $600,000
- Borrower owes: $110,000 (Original loan + Program Share of Appreciation)
CalHFA’s Dream For All Shared Appreciation Loan Program represents a significant step towards making homeownership more inclusive and attainable for Californians. For more information, visit CalHFA’s website or contact us at 877.9.CalHFA (922.5432). Let’s turn dreams into reality together!