California has launched a new program designed to offer down payment assistance to first-time homebuyers.
The program, called the "California Dream For All," will provide up to $250 million in down payment assistance for first-time homebuyers starting this spring. Last year, the same program doled out $300 million in down payment assistance. That fund ran out 11 days later.
How Is This Year's Program Different?
Last year, the program operated on a first-come, first-serve basis. However, some realtors and lenders reported that clients who received down payment assistance were already far along the home purchase process, per Cal Matters.
This year, California is aiming to reach a more diverse group of borrowers. To do so, the state is opting out of its first-come, first-serve basis and is instead launching a lottery model. The program is run by the California Housing Finance Agency.
"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," the agency said in a statement. "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."
Under the program, first-time homebuyers are required to find a state-approved lender and start working on an application. Buyers will have to submit their applications when the lottery opens in early April.
The agency expects between 1,700 and 2,000 buyers to get down payment assistance. Winners will get 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, when it sells in the future. Lottery winners would have 60 days to spend the fund on a home.
In addition, the state will set aside a number of vouchers for each region in California. The number will be based on the region's share of the state's households. This system was made to avoid any geographic disparities that appeared in last year's program. In 2023, Los Angeles County only received 9% of down payment assistance despite representing 25% of the state's population.
