Some first-time homebuyers in California are about to get some much-needed help from the state. This year’s version of the government program called A dream for everyone offers up to $150,000 per buyer to help with expenses associated with purchasing a home. In total, the program will provide $250 million.
Dream For All will pay up to 20% of the purchase price unless the amount exceeds $150,000. It can be used for down payments and closing costs or even in combination with a separate but related program.
Home prices in California are extremely high following a surge in housing construction over the past few years and decades of failed policies. Only 16% of households qualified to purchase a single-family home at the median price in the second quarter, according to the California Association of Realtors. average house price in California is approximately $765,000, and average family income approaching $92,000.
Simply put, California doesn’t have enough homes for its population—and everyone knows it. Rents and housing prices are insanely high, which in the worst case scenario has led to an increase in homelessness. But in reality, residents are burdened by unaffordable housing costs. This is one of the reasons why people are fleeing the state in droves; According to a recent Bank of America study, San Francisco and Los Angeles experienced the largest population losses from spring 2020 to summer 2023. But Texas cities like San Antonio and Austin saw the biggest gains. Not to mention, Texas’ three largest housing markets built 300% more homes than California last year, despite having smaller populations. No wonder. It is much easier to build homes in Texas than in California due to land use restrictions and local controls. The former tends to be less regulated and builds homes to keep up with its population and keep home prices within reach.
Gov. Gavin Newsom last year signed more than 50 bills aimed at addressing “California’s decades-long housing crisis by making it easier and faster to build new housing.” release reading from his office. However, the state is practically ground zero for the “not in my backyard” and “yes in my backyard” development wars. Just imagine a small wealthy town in San Mateo that applied for historic district status simply to get around housing laws, especially those passed by Newsom himself.
However, money is not a handout, and California is not the first state to offer down payment assistance. This is a type of loan, although the “interest” amounts vary. Once homeowners sell their property, they will be required to pay 20%, as well as 20% of the amount the home has appreciated during that time. (If the property loses value or does not appreciate in value, sellers will only be required to pay back the original amount received).
Applications for participation in the program are accepted until April 29. Who gets the money will be decided by a random lottery. Once selected, applicants will have 30 days to find their home and get it under contract. Dream For All debuted last March and was an immediate hit (which is why the lottery selection method was introduced this year).
Qualified applicants must be not only first-time home buyers, but also first-generation home buyers (that is, their parents do not own a home in the United States). You must be a California resident with a credit score of at least 680. You will need to earn less than income limit threshold, which varies from county to county, and plan to make this home your primary residence. For example, in Los Angeles County average family income is about $83,000 and the limit is $155,000.