California offering up to $150K in down payment assistance
NORWALK – California will give out $250 million in down payment assistance this spring as it relaunches its widely popular program aimed at helping first-time homebuyers.
Last year, the Dream for All program started with $300 million and it all ran out in just 11 days.
This year, the California Housing Finance Agency made changes aimed at reaching a more diverse group of borrowers across the state. This time, instead of the program launching on a first-come, first-serve basis, there will be a lottery.
How does the down payment assistance lottery work?
“The next round of the California Dream For All shared appreciation loan program will be focused on first-generation homebuyers and use a lottery system to ensure an equitable distribution of loans,” read a statement from the department. “Interested homebuyers can get started working with an approved loan officer or approved lender now in preparation to submit applications in April for the lottery.”
The state will give up to 20% of the purchase price, or $150,000, whichever is lower. The loan will then be paid back, plus a share of the home’s appreciation whenever it sells in the future.
Officials estimate is between 1,700 and 2,000 lottery winners will receive vouchers and will then have 60 days to spend on a home.
Edgar Ramos, a Norwalk-based real estate agent who assists with Dream For All applications, said the program will make homeownership more attainable.
“For many people, especially first time homebuyers, the down payment is the largest deterrent to buying property,” Ramos said. “You should only apply if you’re serious about buying a home. Once you’re approved, the process moves quickly to find a home, make an offer and close escrow.”
It’s unclear if the state will allocate more funds after the $250 million is depleted. Even so, Ramos said there are other programs available to help with down payments, including CalHFA, Chenoa and FHA, which requires only a 3.5% down payment.
For questions about the Dream For All program, call Ramos at (562) 359-7048.