Gov. Gavin Newsom, D-CA, recently announced a new program that would provide down payment and closing cost assistance to first-generation home buyers.
During the announcement, Newsom noted that 1,700 first-generation buyers have been conditionally approved for the California Dream For All Shared Appreciation Loan Program. Under the new initiative, first-generation buyers could get vouchers amounting up to 20% of a home's value, with a limit of $150,000. The vouchers can then be used to cover down payment and closing costs.
"As part of the state's comprehensive efforts to improve affordability, build generational wealth, and unlock access to housing, Dream For All is paving the way home for thousands of Californians. This program is more than just financial assistance - it's about providing a pathway for individuals to achieve their California dream," Newsom said in a press release.
The initiative will be available for low- to moderate-income first-generation homebuyers. Individuals looking to register for the vouchers should be first-generation homebuyers. All borrowers should also be first-time buyers.
Buyers must register for a voucher. California will then hold a randomized drawing to select registrants who will receive the voucher. All buyers who are selected for the program will have 90 days to find a home using the Dream For All vouchers. When they sell or refinance the home, they will repay the initial amount of assistance and up to 20% of any increase in the home's value. The proceeds will be used to fund the next round of vouchers.
Behind California's Dream for All Program
The initiative is the second round of the Dream For All program. The first round, which was introduced last year, provided vouchers to 2,200 families across the state.
The program will allocate funds for the vouchers across different regions, including the Capital Region, Central Coast, Central Valley, Inland Empire, Los Angeles, Orange County, San Diego, and the San Francisco Bay Area.
As of May 2024, the median price of homes in California was $859,100, marking a 9.7% year-over-year increase, per Redfin. In some cities, such as Riverside, hopeful buyers would need an average of 23.6 years to save up a down payment for a median-priced home to comfortably afford mortgage payments.
