For millions of people, the dream of homeownership in California is almost impossible due to skyrocketing prices. Recognized for its steep real estate market, California ranks among the priciest places to live in the United States. However, a state-run program, which debuted last year, seeks to help eligible buyers buy a home by providing up to $150,000. And the program is set to launch on Wednesday, April 3, and run for a very limited time.
About the program
The California Dream for All Shared Appreciation Loan Program, first launched last year, quickly captured widespread interest. The state initially allocated $300 million to fund applications, a sum that was spent in just 11 days. First-time homebuyers will now again have the chance to apply since the program is set to launch on April 3. Eligible buyers will have a chance to receive up to 20 percent off their down payment, with grants reaching up to $150,000. Interested homebuyers should note that the program, operating on a lottery system, is open for a limited time, with applications accepted until May. The application process for the program will close on April 29.
The requirements
To be eligible, applicants must be first-time homeowners, defined as individuals who have not owned a home in the last three years or have never owned one. Applicants must not own investment property and must intend to permanently live in the purchased home. The income limits are set at 120 percent or below the median income for the applicant’s county. Additionally, at least one applicant must be a first-generation homebuyer. Last year, the program aided 2,182 homebuyers, with 55 percent belonging to communities of color, according to the program’s report.
What happens if you sell the house?
The program does not restrict participants from selling their homes in the future. If a beneficiary sells their home, they are required to share a portion of any profit with the state, proportional to the program’s contribution. The homeowner is only required to repay the state’s original 20 percent if the home’s value has not increased.
Growing house prices
Redfin reports that the median sale price for homes in California reached $785,600, marking an 11.4 percent increase from the previous year. However, the California Dream for All Shared Appreciation Loan Program significantly eases the financial burden for potential homeowners. Applicants who will be accepted into the program don’t have to worry about monthly payments and huge interest rates that become a growing problem for people over a longer period of time. Owners are only required to pay back the state once they sell the property.
Read also: Migrant crisis shifts to Democratic-led California and Arizona, Texas Gov. celebrates the ‘win’
Undocumented illegal immigrants can also apply
Earlier this year, Assemblymember Joaquin Arambula (D-Fresno) put forward Assembly Bill 1840. This legislation aims to extend eligibility for the California Dream for All program to undocumented immigrants, granting them the same opportunities as American residents within the state to secure loans for first-time home purchases.
Explaining the need for the bill
Arambula introduced this bill because the original program aimed to make it easier for people with low to middle incomes to own a home, but the rules didn’t clearly say if people without legal immigration status could apply or not. Arambula’s legislation aims to make sure that people have the opportunity to achieve home ownership in California, regardless of their immigration status.
“It’s that ambiguity for undocumented individuals, despite the fact that they’ve qualified under existing criteria, such as having a qualified mortgage,” he said in an interview. “Underscores the pressing need for us to introduce legislation.” “Homeownership has historically been the primary means of accumulating generational wealth in the United States,” he added. “The social and economic benefits of homeownership should be available to everyone.”
