California is giving up to $150,000 to help first-time homebuyers

Applications for California’s down payment assistance program for first-time homebuyers are now open.

The state-funded program, called Dream For All, will be giving out $250 million to assist thousands of first-time homebuyers this year. Buyers can receive up to $150,000 towards their purchase.

Who is eligible to apply?

• All borrowers, including co-borrowers, must be a first-time homebuyer, defined as someone who has not owned a property or lived in a home owned by a spouse during the past three years
• At least one person must be a first-generation homebuyer meaning their parents do not own a home in the United States
• All applicants must be California residents
• Borrowers must plan to reside in the home as their primary residence
• Applicants must make under the income limit threshold. Each California county will have a different income limit
• Applicants must have a credit score of 680 or higher and a debt-to-income ratio of no more than 45%
• Anyone who has ever been placed in foster care will be eligible

How does the shared appreciation loan work?

The program will provide a loan of up to 20% of the purchase price of a home or a maximum amount of up to $150,000. The money can be used to help finance a down payment, closing costs or a first-time mortgage.

For example, if you bought a $500,000 home, you’d receive 20%, or $100,000, to help with your down payment and closing costs.

If you sell the home in the future, you’ll be required to pay back the 20% loan, plus 20% of the home’s appreciation.

For example, if the $500,000 home sells for $700,000, there is a $200,000 appreciation. You would owe 20% of that — or $40,000 — in addition to the original loan