20% Down Payment Assistance – California Dream For All

20% Down Payment Assistance – California Dream For All

GTG Financial, Inc
GTG Financial, Inc
Published on March 27, 2023

20% Down Payment Assistance – California Dream For All

CalHFA released the guidelines for the much-anticipated Dream for All 20% down payment assistance program.
Borrower Eligibility + Requirements:
  1. 🏠 Must be a first-time buyer.
  2. 🔑 Occupy the property as a primary residence; non-occupant co-borrowers are prohibited.
  3. 🧑‍🏫 CalHFA borrowers must complete two levels of homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.Only one occupying first-time borrower on each loan transaction.
    #1 Course – ONLINE: eHome’s eight-hour Homebuyer Education and Counseling course is the only online course accepted by CalHFA. (fee: $99) Other online courses like Frameworks and HomeView are not acceptable because they do not provide a one-hour, 1-on-1 counseling follow-up session.
    #2 Course – ONLINE: This education is free and online only. Visit calhfadreamforall.com to get signed up and take the course.
  4. 💵 Meet CalHFA income limits for this program. ($159k – $300k, County dependent).
  5. 📊 Minimum Credit Scores:680 FICO up to 45% Debt to Income ratios.
    700+ FICO allows 50% Debt to Income ratios.
  6. 🛠️ Mandatory Home Warranty Coverage
  • CalHFA requires that all first-time homebuyers obtain a one-year home warranty protection policy.
  • The Home Warranty must cover the following items:
    Water Heater(s)
    Air Conditioning
    Heating
    Oven/Stove/Range
Property Requirements
  1. Be a single-family, one-unit residence, including approved condominium/PUDsGuest houses, granny units, and in-law quarters may be eligible
  2. Manufactured housing is permitted
  3. Condominiums must meet the guidelines of the first mortgage.

At GTG Financial, we have several wholesale lenders we work with that are CalHFA approved, so you are covered.

Verify my mortgage eligibility (Dec 5th, 2023)

In order for us to apply, or “reserve” Down Payment Assistance funding, the client must already be in contract and they must have completed the homebuyer education requirements. This is a first come, first serve product.

Borrowers cannot apply and set aside funds or hold a place in line for when they eventually get in contract.

  • Shared appreciation means that 15% – 20% of the homes gained equity would be “shared” back to CalHFA and the state. Below is the 20% example.

  • The 20% loan will sit in 2nd position as a silent 2nd. So no payment until all paid back in a lump sum. Think of the “interest” as the shared appreciation component of this product. 
  • The buyer will be fully leveraged up at 100% CLTV and as a result, you will need to look at a 5-10 year timeline before exiting this loan product or home.
    CalHFA will allow a borrower to refinance the 1st mortgage as a rate/term refi ONE TIME and not trigger the repayment of the 2nd lien or Shared Appreciation component.
    This could be very advantageous when we see rates fall in the next 6-24 months. Per CalHFA this is, “One time and one time only” so we’ll need to time this refi well.
  • Funding will be VERY limited. There was $300MM set aside to fund this program for 2023. CalHFA is estimating there will be roughly enough funding for approximately 2,600 loans.
There are already HUNDREDS, likely THOUSANDS of buyers teed up and pre-approved to go shopping and utilize this program.  The program is scheduled to be renewed next year, but the amount of funding is unknown at this time.

Show me today's rates (Dec 5th, 2023)
GTG Financial, Inc
GTG Financial, Inc
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(707) 546-0440

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