California “Dream For All” Is Apparently Not For All As Budget Gets Depleted In Just 12 Days
Demand for California’s new downpayment aid program overloaded the system, depleting its $300 million budget in less than 12 days, despite the fact that it only assisted over 2,400 first-time homebuyers.
The California Housing Finance Agency (CalHFA) recently announced the California Dream for All Shared Appreciation Loan, which sought to provide up to 20% of the home purchase price for the down payment and closing fees to homebuyers earning up to $211,000 on a 0% interest rate.
But high demand ran the program to the ground, with applications put on pause. However, the legislator who proposed the initiative reacted positively to the news.
“It is incredible and inspiring to see that the launch of the California Dream for All program has already been so successful,” State Senate President Pro Tempore Toni Atkins said in a statement. “The fact that it has helped more than 2,400 first-time homebuyers with their down payments in its first two weeks is terrific.”
The so-called Dream for All program was initiated with the passage of Assembly Bill 140 in 2021. This is designed in which the state gives a portion of the down payment in exchange for a share of the property.
According to the legislation, the loan, along with a share of the home’s appreciated worth, will be reimbursed when the property is resold.
The original 2021 text envisaged funding the project with $1 billion each year for ten years. According to the idea, the $10 billion investment would benefit more than 150,000 Californians.
The original sum was then reduced to $500 million in 2022 after legislative debate, and with the state facing a $25 billion budget deficit for the following fiscal year beginning in July, California Governor Gavin Newsom reduced the investment to $300 million for its introduction in 2023.
“While we are off to a strong start, we can’t truly make a difference in opening the doors to building generational wealth for Californians—especially those who historically have faced systemic barriers to homeownership—without sustained funding for the program,” Atkins added.
With the program designed to work only if home values rise, the status of the California real estate market has some analysts worrying that falling prices could jeopardize taxpayers’ and the state’s investments.
While prices grew substantially in many places across the state from 2020 to 2022, sales volume has plummeted since then, falling by double digits in most counties, and prices are falling, according to latest sales data.
The program’s lowest eligible income for numerous counties throughout the state is $159,000, with San Franciscans and Silicon Valley residents in Santa Clara and San Mateo eligible if they make $300,000, the highest. The income restriction in Los Angeles is $180,000, whereas Orange County has the highest maximum in Southern California, at $230,000.
According to legislators, the budget imbalance has caused the initiative to stall in the absence of more resources.
Information for this briefing was found via Epoch Times and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
