California’s Golden Opportunity for First-Time Homebuyers

Homeownership, a dream pursued by many, has become an increasingly challenging milestone, especially for first-time homebuyers in the competitive California housing market. Prices continue to soar, and the down payment barrier often seems insurmountable for many aspiring homeowners. Recognizing this challenge, the California Housing Finance Agency (CalHFA) has introduced an innovative solution to make the dream of homeownership more attainable.

In late March, CalHFA launched the California Dream For All Shared Appreciation Loan program, a groundbreaking initiative aimed at qualified first-time homebuyers. Unlike traditional loan programs, this unique opportunity offers loans worth up to 20% of the purchase price of a house or condominium, all without charging interest or requiring monthly payments.

Designed as a down payment assistance program, the Dream For All Shared Appreciation Loan works in conjunction with the Dream For All Conventional first mortgage. It aims to ease the financial burden on homebuyers by assisting them with down payment and closing costs, a crucial step toward making homeownership a reality for countless Californians.

Loan Details

The California Dream For All Shared Appreciation Loan program has been engineered with the specific needs of first-time homebuyers in mind. Unlike typical loans, it does not carry interest and requires no monthly payments, but is instead a Down Payment Assistance Program.

The program provides loans that can cover up to 20% of the purchase price of a house or condominium. The loans provided under this program are used specifically for down payment assistance and to cover closing costs. That means qualified buyers can essentially get into the market with no down payment, which is commonly the biggest obstacle for first-time homebuyers.

These loans are structured as a second mortgage. They aren’t repaid month by month like a traditional loan. Instead, repayment is deferred until the property is sold, allowing homebuyers to benefit from immediate financial relief without the pressure of a monthly financial commitment.

Repayment Structure

Look at the California Dream For All Shared Appreciation Loan program as a governmental investment in your home purchase. You don’t need to make payments on the loan, but when the home is sold, or the mortgage is refinanced, the borrower repays the original amount of the loan plus 20% of the increase in the home’s value. This share in appreciation ties the loan’s repayment to the property’s financial performance, creating a partnership-like relationship between the lender and borrower.

But what happens if the home doesn’t increase in value? Does the homeowner still pay? No. If the home is ultimately sold for the same amount it was purchased for or less, the buyer won’t need to pay the additional 20%.

So while there isn’t a monthly payment on the loan, the effective interest rate in this program is equal to the average annual increase in the home’s value. Historically, appreciation has been about 5% annually in California. However, some years are more than others.

CalHFA Application Process

The downside of this program is that there aren’t limitless funds available. When the first program was released, it was able to serve about 2,300 applicants before reaching its limit. When the program resumes in the fall, it shouldn’t run out of money so quickly, but if you want to make sure you don’t miss yourself, you must start working with your loan broker and real estate agent now.

CalHFA does not accept applications directly. Potential borrowers must apply through a CalHFA-approved Lender or one of their Preferred Loan Officers. Borrowers must meet specific credit, CalHFA income limits, and loan requirements set by the CalHFA-approved lender and the mortgage insurer.


With over ten years of experience lending in the real estate space, I am now here to act as your local real estate expert and guide you through the overall home purchase process. Let’s get the process started and find your next home so you can access CalHFA’s outstanding Dream For All Shared Appreciation Loan program.