Zero Interest Down Payment Assistance Programs

Both ZIP and Dream For All loans become due upon the occurrence of a “trigger event.” The most common triggers are:
1. Selling the property.
2. Transferring the title to someone else.
3. Refinancing the first mortgage (with the one-time exception for Dream For All).
4. Paying off the first mortgage in full (e.g., after 30 years).
5. Formal filing of a Notice of Default (foreclosure initiation). Because payments are deferred for the entire loan term, borrowers must plan for this eventual balloon payment when they decide to sell or alter their financing. 

No, you cannot “stack” the Dream For All Shared Appreciation Loan with the Zero Interest Program (ZIP) or the MyHome Assistance Program. You must choose one path: either the high-equity Dream For All loan (up to 20% assistance) OR the CalPLUS path which combines MyHome (down payment) and ZIP (closing costs). However, Dream For All can be layered with other non-CalHFA subordinate loans, such as community grants or city-specific assistance, provided those loans meet Fannie Mae Community Second guidelines.

For the Zero Interest Program (ZIP), refinancing your first mortgage generally triggers an immediate repayment requirement. CalHFA typically does not subordinate ZIP loans to a new first mortgage, meaning you must pay off the ZIP balance in full when you refinance. However, for the Dream For All program, CalHFA allows a one-time limited cash-out refinance of the first mortgage without requiring immediate repayment of the shared appreciation loan, provided you meet specific resubordination guidelines at the time of the transaction.

Although the Dream For All loan has a 0% interest rate, you compensate the program by sharing your home’s equity. If your income is within standard limits, you generally repay the principal plus 20% of the home’s appreciation upon sale. If you are a lower-income borrower (≤80% AMI), the share is reduced to 15% of the appreciation. This “shared appreciation” model replaces traditional interest. The total amount you repay (principal + appreciation) is capped at 2.5 times the original loan amount to protect you in rapidly rising markets.

No, neither the Zero Interest Program (ZIP) nor the Dream For All Shared Appreciation Loan are forgivable grants. They are deferred-payment loans that result in a lien being recorded against your property. You are legally obligated to repay the funds. For ZIP, you repay the original principal amount. For Dream For All, you repay the principal plus the program’s share of the appreciation. The only exception in CalHFA’s portfolio is the ADU Grant Program, which is a true grant for Accessory Dwelling Units and does not require repayment.

The loan amount for ZIP is calculated as a percentage of your first mortgage amount, not the sales price. Borrowers can typically choose between a ZIP loan of 2.00% or 3.00% of the first mortgage balance. For example, on a $400,000 mortgage, a 3% ZIP loan would provide $12,000 in assistance for closing costs. Because the interest rate on the CalPLUS first mortgage may vary based on the ZIP amount chosen (2% vs 3%), borrowers should review pricing options with their lender to decide which level of assistance is most beneficial.

Not necessarily. To qualify for ZIP, you must be a First-Time Homebuyer and meet CalHFA’s income limits for your county. Additionally, ZIP is not a standalone product; it must be paired exclusively with a CalPLUS first mortgage (CalPLUS Conventional or CalPLUS FHA). This means if you choose a standard “CalHFA Conventional” or “CalHFA FHA” loan, you are not eligible for ZIP. You must specifically select the CalPLUS loan product, which may have a slightly higher interest rate on the first mortgage to offset the benefit of the zero-interest assistance.

The Dream For All Shared Appreciation Loan is a distinct zero-interest program aimed at first-generation homebuyers. It provides a loan for up to 20% of the home’s value (capped at $150,000) for down payment and closing costs. While the interest rate is listed as 0.00%, the cost of borrowing is determined by the home’s growth in value. Instead of paying interest, you repay the original principal plus a share of the home’s appreciation (equity growth) when you eventually sell, transfer, or refinance the property.

No, ZIP funds are strictly limited to closing costs and prepaid items. You generally cannot use ZIP proceeds to satisfy the minimum down payment requirement for your loan. If you need assistance with the down payment, you must combine ZIP with another program, such as the MyHome Assistance Program. MyHome can be used for the down payment, while ZIP covers the closing costs, allowing for a “stacked” assistance structure where MyHome is in the second lien position and ZIP is in the third lien position.

The Zero Interest Program (ZIP) is a subordinate loan designed to help homebuyers cover closing costs and prepaid items (like taxes and insurance). As the name implies, it carries a 0.00% interest rate for the life of the loan. It is a deferred-payment loan, meaning you do not make monthly payments on it. The principal balance remains constant because no interest accrues. You are only required to repay the exact amount you borrowed when a specific “trigger event” occurs, such as selling the home, refinancing, or paying off your first mortgage.