CA Dream For All Shared Appreciation Loan Program

The Dream For All Shared Appreciation Loan is a down payment assistance program for first-time homebuyers to be used in conjunction with the Dream For All Conventional first mortgage for down payment and/or closing costs. 

Upon sale or transfer of the home, the homebuyer repays the original down payment loan, plus a share of the appreciation in the value of the home. 

• Dream For All provides a loan for 20% of the home purchase price.
• The homeowner pays back the original loan amount plus 20% of any appreciation in the value of the home.
•  The amount of shared appreciation is capped at 2.5 times the original principal amount. 
• Homebuyer must register for a voucher. A randomized drawing will select registrants who will receive the voucher. This will not be first come, first served.
• cannot be combined with any other CalHFA down payment assistance MyHome or Zip

Phase 2 Funds: $220 Million. Projected up to 2,000 Reservations

• Be a first-time Homebuyers
• All borrowers must occupy the property as their primary residence.
• Should meet credit, Income and loan requirement of CalHFA’s first mortgage loan program
• At least one borrower must be a first generation homebuyer & a current California resident.
• 8 Hours of Homebuyer Education is required
• Non-occupant Co-Borrowers or Co-Signers are not allowed.
• Maximum Loan amount is up to $150,000 or 20% of the sales price or appraised value, whichever is less.
• 680 Minimum Fico Score
• 45% DTI for FICO 680+ and 50% DTI for FICO 700+

NOTE: All information submitted subject to audit and verification process.

This is a 2nd Lien position loan. 20% of the Sell price or 150K can be used for down payment assistance and /or closing costs.

Determination of First-Generation Homebuyer Status

• A first-generation homebuyer is defined as a homebuyer who has not been on title, held an ownership interest or have been named on a mortgage to a home (on permanent foundation and owned land) in the United States in the last 7 years, and; 
• To the best of the homebuyer’s knowledge whose parents (biological or adoptive) do not have any present ownership interest in a home in the United States or if deceased whose parents did not have any ownership interest at the time of death in a home in the United States, or; 
• An individual who has at any time been placed in foster care or institutional care (type of out of home residential care for large groups of children by non-related caregivers). 

First-Time Homebuyer Definition 

To qualify for the Shared Appreciation Loan, all borrowers, including co-borrowers must reside in the home and meet the definition of a first-time homebuyer. 

• A first-time homebuyer is defined as a borrower who has not had an ownership interest in any principal residence or resided in a home owned by a spouse during the past three years. 

This is not a first come 1st serve system any longer. CalHFA will be putting together a website where the borrower will register – from there a lottery system will be in place with geographical emphasis whereas eligible borrowers will be randomly selected and receive a voucher with time to go and shop for a home.

Borrower maximum contribution is 5% of sales price.

CalHFA requires one borrower to complete Homebuyer Education

• Online - eHOME - The only online course accepted by CalHFA

OR

• In Person or Virtual - (1) Neighborworks America (2) Any HUD Approved 8 hour education

AND

• Dream For All Shared Appreciation Supplemental Education

• Income cannot exceed CA Dream for All Income Limits
• Income calculated according to Fannie Mae Guidelines. 
• Reducing a borrower's income or removing a borrower for purposes of meeting income limits is expressly prohibited.

MAX DTI:

45% for under 700 credit score

50% for 700 or higher credit score

DU Approval Eligible

• 680 minimum credit score for Standard rate
• 660 minimum credit score for Low Income rate

Property must meet the requirements of the applicable CalHFA first mortgage.

• Must be a Single family one Unit property
• Owner Occupancy Only
• Manufactured Homes are OK
• One year Home Warranty required 

Term:  - not to exceed 30 years

Requires DU Approval

Repayment of the principal and any share of the appreciation on the Shared Appreciation Loan shall be due and payable at the earliest of the following events: 

• Transfer of title 
• Sale of the property
• Payoff of the first loan
• Payoff of the subordinate loan principal balance
• Refinance of the first loan – see Refinance and Re-subordination section
• The formal filing and recording of a Notice of Default (unless rescinded).

LTV & CLTV:  95% and  105%

This loan is not assumable. 

During the life of the Shared Appreciation loan, CalHFA will allow borrowers to refinance the first mortgage loan into a single limited cash-out refinance (as defined in the Fannie Mae Selling Guide) without requiring immediate repayment of the Shared Appreciation loan one time, and one time only, so long as you also comply with CalHFA’s re-subordination policy.