It’s hit the media, the second round of the government’s “Dream For All” in 2024 will be very different than the first round last year.
Created in 2022, Dream for All was originally envisioned as a 10-year, $10 billion investment before lawmakers scaled it back last year. In 2023 only $300 Million was allocated by the state to fund the Dream For All program, but because of budget issues. Last year frenzied homebuyers eat up all $300 million budgeted for the California Dream for All loan program in just 11 days. That round was first come first served. This round it’ll be distributed through a random lottery/drawing system, and the criteria for who will qualify has been tightened.
A primary change (that will eliminate many) is buyer/borrower isn’t just a “First Time” buyer, but a “First Generation” Homebuyer. In other words their parent did not also own a property, or a property at the time of their death. The gov’t hopes it would especially benefit members of communities that have experienced redlining or low homeownership rates, such as Black and Latino Californians. Not that part of the population that theoretically has the assets to help their adult children purchase a property.
A breakdown of some of the elements of the program:
- Loan Amount – 20% or $150,000 whichever is less
- Can be used for a down payment or closing cost
- Minimum 95% Combined Loan to Value, Maximum 105%CLTV
- Must be used with Dream For All Conventional First (tighter guidelines the FHA, which can be used with other 1st Time buyer programs)
- Cannot be combined with other programs like MyHome or ZIP
- Income cannot exceed CA Dream Limits. Presently Los Angeles County $155,000, Ventura County $195,000
- Impounds required
- Must be a Single Family Unit (SFR, Condo, Manufactured Home, SFR with ADU ok)
- Property must meet lenders/Fannie Mae guidelines
- 1 year Home Warranty required
- All borrowers must be 1st Time buyers. No ownership in real estate in the United States in the last 7 years; parents do not or did not at the time of the death have ownership interest in a residence; or the borrower grew up in foster care
- Eligibility is established via attestation under penalty of perjury. Information submitted is subject to audit and verification through a 3rd party service
- Pre-registration system is estimated to open in April. Random selection of borrowers around June-July. Estimating that 2,000 will be picked from around 20,000 submissions.
- Award quantity is proportionate to household composition by region. Better for Los Angeles, compared to the first Dream of All release. Approval is based on current address and may purchase in any county in which their income qualifies.
- An approved lender must pre-approve the borrower for the program, and submit a Pre-Approval Letter.
- Award good for 90 days to find a property, open escrow, and lender to set aside funds.
- The loan has no payment or interest, based on 20% of shared appreciation on the loan amount at the time of sale, or refinance
- At least one borrower needs to take 1st-time buyer education class, and another on the Shared Appreciation system. Classes are not required before receiving the Dream For All award.
This program can be good to lower the 1st loan amount to lower the interest rate, lower or eliminate Mortgage Insurance, get a better Debt To Income Ratio. There are several Down Payment Assistance Programs for the state, county, city, lenders with proprietary programs. It’s good to analyze each program to determine the best fit for a borrower’s needs and approval capabilities. I’m an approved lender and can be a resource evaluating these possibilities.
Make note, this is a government program. Guidelines and funding can change. This information was accurate at the time of this posing.
Also, the California Housing Finance Agency CalHFA will be giving a presentation on this program and other Down Payment Assistance Programs at the Outwest Real Estate Education Meeting that I Chair in Canoga Park on Friday February 2, 2024, at 8am.
If you are in the Los Angeles area, and have any questions or real estate sales or financing needs, feel free to contact me
Ron Henderson GRI, SRES, SFR, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals (2017-2018)
Chairman – OutWest Marketing Meeting (Real Estate Education)
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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