The CalHFA Dream For All Shared Appreciation Loan Program is out.
It’s a way for buyers to purchase a home with no money down. The State of California has thrown $300 million towards the program, and they will provide a 20% down payment and share the future appreciation.
It’s not a dream for all – it’s only for those who meet the criteria:
- San Diego County income under $211,000.
- 680+ credit score.
- Debt-to-income ratio under 45%.
- Haven’t owned a home in the last three years.
- 8-hour online seminar.
- Seller can pay the buyer’s closing costs.
Here are the FAQs:
https://www.calhfa.ca.gov/homeownership/programs/FAQ-cadfa.pdf
It will be a useful program for homebuyers who don’t strive to buy a quality property – because those are being snapped up by the affluent. I had two different cases this week where my buyers got into bidding wars – 14 offers on a Escondido house under a million, and 8 offers on a mid-$2,000,000 house in La Jolla. Both offered 5% over the list price and lost.
Those who pre-qualify for the Dream For All program and submit an offer on a quality home will likely be shown the back of the line by the listing agent, who will have the more-traditional buyers to choose from.
To paraphrase what George said, the Dream For All may sound good, but you have to be asleep to believe it.
“What happens if the value of the home does not appreciate or loses value?
The principal amount of the Shared Appreciation Loan is still due and payable. If the appreciation of the property is zero or less, no additional monies would be due”
So basically it’s a loan that you only need to pay for the full amout borrowed if the property loses value or stays even. If theres appreciation you can repay the loan with the appreciation when the house is sold.
This program is saying heres come credit for the down to buy a house. Dont worry about paying it back because inflation will pay it for you.
And people say 2008 mortgages were crazy.
CA: We have to do something to make homes more affordable!
Also CA: We need to make sure home prices increase substantially to recover our up front investment on Dream For All homes and to cover these risky loans.
Socialism.