The California Housing Finance Agency (CalHFA) is a state agency that provides financing for affordable housing in California. The CalHFA Dream for All Program is one of its flagship programs, which provides down payment assistance and financing for first-time homebuyers in California. In this blog post, we will explore the CalHFA Dream for All Program in detail, including its eligibility criteria, benefits, and application process.

Eligibility Criteria

To be eligible for the CalHFA Dream for All Program, you must meet the following criteria:

1. First-time Homebuyer: You must be a first-time homebuyer, which means that you have not owned a home in the past three years. If you are a veteran or buying a home in a targeted area, you may be exempt from this requirement.
2. Income: Your income must be within the limits set by CalHFA. These limits vary by county and household size, and they are based on the median income for the area. To find out if you meet the income limits, you can check the CalHFA website or contact a participating lender.
3. Credit Score: You must have a credit score of at least 640. If you have a lower credit score, you may still be eligible for the program, but you may need to take additional steps to improve your credit before applying.
4. Home Price: The home you are purchasing must be within the price limits set by CalHFA. These limits also vary by county and are based on the median home price for the area.

Benefits

The CalHFA Dream for All Program offers several benefits to first-time homebuyers, including:

1. Down Payment Assistance: The program provides down payment assistance in the form of a loan that can be used to cover the down payment and closing costs. The loan amount can vary based on the purchase price but can be as much as 20% depending on the loan type and other factors.
2. Low Interest Rates: The program offers low-interest rates on the first mortgage, which can help reduce your monthly payments and save you money over the life of the loan.
3. Tax Credits: First-time homebuyers may be eligible for a Mortgage Credit Certificate (MCC), which can help reduce their federal income tax liability. The MCC allows you to claim a tax credit of up to 20% of the interest paid on your mortgage each year.
4. Homebuyer Education: The program requires all borrowers to complete a homebuyer education course, which can help prepare you for the responsibilities of homeownership and ensure that you are making informed decisions about your purchase.

Application Process

To apply for the CalHFA Dream for All Program, follow these steps:

1. Find a Participating Lender: The first step is to find a participating lender who can help you apply for the program. You can search for lenders on the CalHFA website or contact a local housing counseling agency for assistance. (Contact a Participating Lender)
2. Get Prequalified: Your lender will help you determine if you meet the eligibility criteria and prequalify you for a loan. This will give you an idea of how much you can afford to borrow and help you narrow down your home search.
3. Find a Home: Once you are prequalified, you can start searching for a home that meets the program’s price limits and other requirements. Your Realtor can help you find a home that qualifies for the program. (Contact a Participating Realtor)
4. Apply for the Program: When you have found a home that you want to purchase, you can apply for the program through your lender. Your lender will help you complete the application and submit it to CalHFA for approval.
5. Close on the Home: If your application is approved, you can close on the home and receive your down payment assistance loan. Your lender will provide you with a detailed guide on the steps to complete the home purchase process.
6. Complete Homebuyer Education: After closing on the home, you must complete a homebuyer education course. The course covers topics such as budgeting, credit, mortgage financing, and the responsibilities of homeownership. This course is mandatory and must be completed within 60 days of closing.
7. Repay the Down Payment Assistance Loan: The down payment assistance loan must be repaid when the home is sold, refinanced, or no longer your primary residence. The loan can be repaid in full or in part, depending on your financial situation.

In summary, the CalHFA Dream for All Program is an excellent option for first-time homebuyers in California who are looking for down payment assistance and low-interest rate mortgages. The program offers several benefits, including tax credits, homebuyer education, and a low down payment requirement. To apply for the program, you must meet the eligibility criteria and follow the steps outlined above. With the help of a participating lender and a little bit of preparation, you can achieve your dream of homeownership and enjoy the benefits of owning your own home. For more information on the California Dream For All Shared Appreciation Loan Program click here.