Dream for All Program Coming Back?

The California Dream for All program

Was intended to provide eligible first-time homebuyers with up to 20% of the purchase price or appraised value of the home, whichever is less, to help cover their down payment and closing costs. The program was launched in March 27^th 2023 and was initially allocated $300 million in funding. This was after losing $200 million in funding due to state budget deficits.

Unfortunately, due to the high demand for the program.

The funding was exhausted within 2 weeks of its launch. CALHFA received more than 21,000 applications in just 10 days, with requests totaling more than $1.7 billion. Just to make sure you’re following the math. They had $300 Million to give out. They got requests for 1.7 BILLION in 10 days.

CALHFA officials stated that they were overwhelmed by the demand and had to close the program early. They expressed their disappointment at not being able to help more Californians achieve their dream of homeownership.

As of the time of writing this blog, there has been no official announcement on whether the California Dream for All program will be returning this year or next. However, based on the current status of the State’s budget. And the fact there are alternative down payment assistance programs available for first-time homebuyers. We do not see a quick return likely.

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So what other programs exist?

One such program is the CalHFA MyHome Assistance Program, which provides a deferred-payment junior loan of up to 3.5% of the purchase price or appraised value, whichever is less, to assist with the down payment or closing costs. Another alternative is the CalHFA ZIP Extra Down Payment Assistance Program, which provides a zero-interest loan of up to 3% of the first mortgage loan amount to cover the down payment or closing costs.

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Other down payment assistance programs available in California include the California Homebuyer’s Downpayment Assistance Program, which offers up to 5% of the loan amount to eligible first-time homebuyers, and the School Teacher and Employee Assistance Program, which provides up to $15,000 in down payment assistance to K-12 public school employees.

Obviously these alternatives are not as generous as the Dream for All Program but then again, that’s part of why it ran out of money so quick.

In conclusion, the California Dream for All program by CALHFA was a well-intentioned program that unfortunately ran out of funding due to high demand.

While it is unclear whether the program will be returning this year or next, there are alternative down payment assistance programs available for first-time homebuyers in California. Prospective homebuyers should explore their options and speak with a qualified mortgage professional to determine which program is right for them.

To speak to a licensed team member about available down payment assistance loans go HERE