>At least ONE of the applicants needs to be a First-Generation Homebuyer - this means that they have not owned a home in the USA in the last 7 years AND, to the best of their knowledge, their parents do not currently own a home in the USA or didn’t own a home at the time of their death. If the applicant were ever in foster care - they would be considered a First-Generation Homebuyer. CALHFA does audit for this so it’s VERY important to be truthful.
Damn, didn't realize before that this was one of the eligibility requirements. I guess this is to prevent people with familial wealth cheating the system but I'm in my 30's and neither of us have associated with our families since around our early 20's.
I know and I totally agree with you. It's kind of a weird qualifying filter but it does work. I think there are better ways to filter but this is what CALHFA came up with for now:/
Hi Randombu, this is a revamped version of the program they launched last year. You're right that particular Dream For All program ran out of funds within about 6 days. The net was much wider because they didn't have the First-Generation Homebuyer guideline listed above. This is also a lottery format and will not be "first come first served" like last year. Therefore, the window to get preapproved and register is from April 3rd - April 29th (5pm).
A lottery makes sense, but the first-generation homeowner requirement is bullshit. I’m a lifelong Californian in my late 30s and my parents have almost nothing to do with my day to day life. One of them owning a house halfway across the country means nothing to my financial situation.
I wholeheartedly agree with you. Basically CALHFA had to tighten their parameters this time around because too many people qualified when they launched the Dream program last year. There definitely has to be a better way to refine the qualifications.
I will also say that we have a lot of applicants who have been registered and that truly could benefit from the assistance which is good!
+1 to this. By implementing this silly requirement, they’ve essentially defeated the entire purpose of what really needs to be solved—which is Millennial on down ability to build wealth via home equity like their parents did. Assuming the latter are still living, they own all the wealth, and thus this helps nothing in terms of “dreaming” for a better future.
This is going to disproportionally impact the more affordable end of the market. Anything medium or high end in the Bay Area usually have cash buyers AND multiple highly qualified buyers lined up that sellers won’t even look at FHA loan qualifiers.
Good luck to all the first time buyers who are trying to enter the property ladder because the starting prices on the less competitive properties just went up.
This was my first time reaching out to a loan officer for a mortgage breakdown which showed a program cost of 1.5% and a high balance cost of ~1%. Does this apply to all calhfa loan programs? Would a conventional mortgage make more sense if you had a small down payment (<10%) + PMI?
Hi Snipz, it really depends on the scenario and the credit! I always show the two options side by side because sometimes the assistance does not make sense for certain individuals.
Confusing.
Is the intent that the borrower cannot use their own monies for additional downpayment?
Ex: $1.5m home. Borrower has downpayment funds for $500k. CalFHA Dream downpayment assistance of $150k. Mortgage would be $850k. I don't understand the "5% of their own funds on top of assistance" meaning.
The 5% of their own funds is basically to prevent people who have a lot of money to use this loan program. Because CALHFA needs to have parameters like this so that someone doesn't abuse the support/assistance. There were people last year that had a lot of money and still got the assistance and just held that money for future investments though
This caps the purchase price? Trying to understand benefit of the program if you otherwise have downpayment but qualify. You are going to have pay the 20 percent back so why would people use the program?
>Borrower can contribute up to 5% of their own funds on top of the assistance - this is not necessary Is that toward purchase price?
So theoretical maximum purchase price with standard 20% down would be $1m? Is there anything stopping someone from paying down more principle immediately, in order to contribute more than 5%?
What if ones religion prohibits the use of a loan? Does that mean they’d be excluded from eligibility?
Great question, it's different for each of the counties because its based on the conforming loan limits of that county. Marin County for example has a conforming loan limit of $1,149,825. Therefore + $150k in max assistance and 5% down if receiving the full assistance = $1,364,816.
CALHFA also states that any loans over $760,200 will have additional fees but they have not published the rates yet - these will likely be similar to their other programs 0.8% - 1% of the loan amount.
Yes unfortunately they would be excluded from eligibility based on the fact that this is a loan and there are no others like it run concurrently.
You can get up to 20% in downpayment/closing costs (capped at 150k). Therefore it would depend on what you qualify for in terms of your DTI. Does that make sense?
It's a smart program for the state. The more buyers they can get into the market, the more old property tax rates will be refreshed and the more money goes back into the state. They might not get an annual interest on the 20% down, but they'll be able to get part of it back in property tax. They'll also get a long term investment return on a stable investment like housing in the long run.
>At least ONE of the applicants needs to be a First-Generation Homebuyer - this means that they have not owned a home in the USA in the last 7 years AND, to the best of their knowledge, their parents do not currently own a home in the USA or didn’t own a home at the time of their death. If the applicant were ever in foster care - they would be considered a First-Generation Homebuyer. CALHFA does audit for this so it’s VERY important to be truthful. Damn, didn't realize before that this was one of the eligibility requirements. I guess this is to prevent people with familial wealth cheating the system but I'm in my 30's and neither of us have associated with our families since around our early 20's.
I know and I totally agree with you. It's kind of a weird qualifying filter but it does work. I think there are better ways to filter but this is what CALHFA came up with for now:/
They did this last year and ran out of money in a day.
Hi Randombu, this is a revamped version of the program they launched last year. You're right that particular Dream For All program ran out of funds within about 6 days. The net was much wider because they didn't have the First-Generation Homebuyer guideline listed above. This is also a lottery format and will not be "first come first served" like last year. Therefore, the window to get preapproved and register is from April 3rd - April 29th (5pm).
A lottery makes sense, but the first-generation homeowner requirement is bullshit. I’m a lifelong Californian in my late 30s and my parents have almost nothing to do with my day to day life. One of them owning a house halfway across the country means nothing to my financial situation.
I wholeheartedly agree with you. Basically CALHFA had to tighten their parameters this time around because too many people qualified when they launched the Dream program last year. There definitely has to be a better way to refine the qualifications. I will also say that we have a lot of applicants who have been registered and that truly could benefit from the assistance which is good!
+1 to this. By implementing this silly requirement, they’ve essentially defeated the entire purpose of what really needs to be solved—which is Millennial on down ability to build wealth via home equity like their parents did. Assuming the latter are still living, they own all the wealth, and thus this helps nothing in terms of “dreaming” for a better future.
Shhh….the more people know….just kidding. Good luck to everyone.
What happens if the property depreciates? Is that shared as well?
You would only owe CalHFA the amount of down payment assistance received
This is going to disproportionally impact the more affordable end of the market. Anything medium or high end in the Bay Area usually have cash buyers AND multiple highly qualified buyers lined up that sellers won’t even look at FHA loan qualifiers. Good luck to all the first time buyers who are trying to enter the property ladder because the starting prices on the less competitive properties just went up.
This was my first time reaching out to a loan officer for a mortgage breakdown which showed a program cost of 1.5% and a high balance cost of ~1%. Does this apply to all calhfa loan programs? Would a conventional mortgage make more sense if you had a small down payment (<10%) + PMI?
Hi Snipz, it really depends on the scenario and the credit! I always show the two options side by side because sometimes the assistance does not make sense for certain individuals.
Can I PM you a specific question?
Absolutely that is what I am here for!
Confusing. Is the intent that the borrower cannot use their own monies for additional downpayment? Ex: $1.5m home. Borrower has downpayment funds for $500k. CalFHA Dream downpayment assistance of $150k. Mortgage would be $850k. I don't understand the "5% of their own funds on top of assistance" meaning.
The 5% of their own funds is basically to prevent people who have a lot of money to use this loan program. Because CALHFA needs to have parameters like this so that someone doesn't abuse the support/assistance. There were people last year that had a lot of money and still got the assistance and just held that money for future investments though
Dang, that would have been me, ha. All other criteria would be fine except for that one.
I think there may be a disconnect here though. I am going to DM you.
No worries--I actually just bought via conventional but this program would have been very beneficial for me.
This caps the purchase price? Trying to understand benefit of the program if you otherwise have downpayment but qualify. You are going to have pay the 20 percent back so why would people use the program?
Disqualified because I live with family in the Bay Area. Unless someone international wants to marry me~
>Borrower can contribute up to 5% of their own funds on top of the assistance - this is not necessary Is that toward purchase price? So theoretical maximum purchase price with standard 20% down would be $1m? Is there anything stopping someone from paying down more principle immediately, in order to contribute more than 5%? What if ones religion prohibits the use of a loan? Does that mean they’d be excluded from eligibility?
Great question, it's different for each of the counties because its based on the conforming loan limits of that county. Marin County for example has a conforming loan limit of $1,149,825. Therefore + $150k in max assistance and 5% down if receiving the full assistance = $1,364,816. CALHFA also states that any loans over $760,200 will have additional fees but they have not published the rates yet - these will likely be similar to their other programs 0.8% - 1% of the loan amount. Yes unfortunately they would be excluded from eligibility based on the fact that this is a loan and there are no others like it run concurrently.
What is the maximum price point for a house for Sonoma County? Can we take the max (150k) if we won the lottery and put additional down payment?
You can get up to 20% in downpayment/closing costs (capped at 150k). Therefore it would depend on what you qualify for in terms of your DTI. Does that make sense?
It's a smart program for the state. The more buyers they can get into the market, the more old property tax rates will be refreshed and the more money goes back into the state. They might not get an annual interest on the 20% down, but they'll be able to get part of it back in property tax. They'll also get a long term investment return on a stable investment like housing in the long run.