Dream For All Shared Appreciation Note

Due to high demand, accessing the Dream For All program requires securing a voucher through a randomized drawing rather than a first-come, first-served application. Prospective borrowers must first work with an approved lender to determine eligibility and obtain a Pre-Approval letter. Once the registration portal opens, borrowers submit their application for a voucher. If selected in the random drawing, the borrower receives a voucher and has a specific timeframe (e.g., 90 days) to enter into a contract to purchase a home. This system helps manage the limited funding available for the program.

The Dream For All loan becomes due and payable in full (principal plus shared appreciation) upon the occurrence of specific “trigger events.” These include the sale of the property, the transfer of title (such as adding or removing someone from the deed), or the full payoff of the first mortgage (such as paying it off after 30 years). Additionally, if you default on your first mortgage and a Notice of Default is recorded, the loan becomes due. It is critical to note that the loan is not assumable, meaning you cannot pass the loan or its terms on to a buyer or family member.

No, you generally cannot “stack” the Dream For All Shared Appreciation Loan with other CalHFA down payment assistance programs like MyHome or the Zero Interest Program (ZIP). You must choose between the deep assistance of Dream For All (up to 20%) or the standard assistance of MyHome (3–3.5%). However, you are permitted to layer the Dream For All loan with non-CalHFA subordinate loans, such as community seconds or local city/county grants, provided those loans meet Fannie Mae guidelines and are willing to record in a junior lien position behind CalHFA.

Yes, CalHFA has a specific policy for this program that differs from its other assistance products. You are permitted a one-time limited cash-out refinance of your first mortgage without triggering the immediate repayment of the Shared Appreciation Loan. This allows you to take advantage of lower interest rates in the future to reduce your monthly payments. However, you must comply with CalHFA’s resubordination policy at the time of the refinance. If you perform a “cash-out” refinance (taking equity out of the home) or refinance more than once, the Dream For All loan will likely become due immediately.

If you sell the home and it has not increased in value, or if it has lost value, you are generally not responsible for paying any shared appreciation. In this scenario, you would only be required to repay the original principal amount of the loan. The program shares in the appreciation, but it does not penalize the borrower for market declines. However, you remain responsible for the original amount borrowed ($150,000 or 20%, whichever was used), which effectively means CalHFA takes a subordinate position but expects full repayment of the principal unless the sale proceeds are insufficient to cover it.

No, you are not required to make monthly payments on the Dream For All Shared Appreciation Loan. Repayment is fully deferred for the life of the loan, which matches the term of your first mortgage (typically 30 years). This deferment is designed to make monthly housing costs more affordable for first-time buyers by leaving them responsible only for the principal and interest on the first mortgage, plus taxes and insurance. While you are allowed to make payments toward the principal balance if you choose, doing so does not reduce the shared appreciation percentage you will eventually owe.

Yes, the program includes a consumer protection cap to ensure the repayment amount does not become unmanageable during periods of extreme market growth. The maximum amount of appreciation you will ever have to pay is capped at 2.5 times the original principal loan amount. For example, if you borrowed $100,000, the absolute maximum shared appreciation you would owe—regardless of how much the home value skyrockets—would be $250,000. When you add that to the original principal of $100,000, the total payoff amount would be capped at $350,000.

The amount of appreciation you owe depends on your income level relative to the Area Median Income (AMI). If your income is between 80% of the HomeReady AMI and the CalHFA income limits, the ratio is 1:1. This means if you borrowed 20% of the home’s value, you must repay 20% of the appreciation. However, if your income is ≤ 80% of the AMI, you qualify for a reduced share of 0.75:1. In this scenario, if you borrowed 20%, you would only repay 15% of the appreciation. The appreciation is calculated based on the difference between your original purchase price and the home’s value at the time of sale or payoff.

To qualify for this specific program, at least one borrower on the loan must meet the strict definition of a First-Generation Homebuyer. This means you must not have held an ownership interest in a home in the United States in the last seven years. Additionally, to the best of your knowledge, your parents (biological or adoptive) must not currently own a home in the U.S., or if they are deceased, they must not have owned a home at the time of their death. An exception exists for individuals who were placed in foster care or institutional care; they qualify as first-generation regardless of their parents’ homeownership status.

The Dream For All Shared Appreciation Loan is a specialized down payment assistance program designed to help first-generation homebuyers build generational wealth. Unlike traditional loans that charge interest, this program provides a loan for up to 20% of the home’s purchase price or appraised value (capped at $150,000) to be used for your down payment and closing costs. The unique feature of this loan is that it carries a 0% interest rate; instead of paying interest, you agree to repay the original loan amount plus a share of the home’s future appreciation (increase in value) when you eventually sell or transfer the property.