Types of Down Payment Assistance in CalHFA Loan Programs

No, the First-Generation Homebuyer requirement is specific only to the Dream For All Shared Appreciation Loan. To qualify for Dream For All, at least one borrower must not have owned a home in the last seven years and their parents must not currently own a home (or have owned one at the time of their death). For all other CalHFA assistance programs—including MyHome, ZIP, and MyAccess—you only need to be a First-Time Homebuyer. This is less restrictive, defined simply as someone who has not held an ownership interest in a primary residence within the past three years.

Generally, no. With the exception of the ADU Grant, CalHFA’s down payment assistance products—MyHome, ZIP, MyAccess, and Dream For All—are NOT forgivable-payment loans, not forgivable grants. A lien is recorded against your property for the amount borrowed. While you do not have to make monthly payments, the debt does not disappear over time. You are obligated to repay the full principal balance (plus any accrued interest or shared appreciation) when a “trigger event” occurs. Common trigger events include selling the home, refinancing your first mortgage, transferring the title, or paying off the first mortgage in full.

The interest rates for CalHFA down payment assistance vary by program type. The MyHome Assistance Program and the MyAccess Program both carry a 1.00% simple interest rate. Simple interest is calculated only on the principal balance, avoiding the compounding costs of standard loans. In contrast, the Zero Interest Program (ZIP) and the Dream For All Shared Appreciation Loan both have an interest rate of 0.00%. While ZIP is truly cost-free regarding interest, Dream For All replaces interest with a “shared appreciation” model, where the cost of borrowing is determined by a percentage of the home’s future increase in value.

The Zero Interest Program (ZIP) is the primary CalHFA product restricted solely to closing costs and prepaid items. You cannot use ZIP funds to satisfy the minimum down payment requirement for your loan type. This restriction is why ZIP is mandatorily paired with CalPLUS loans, which often allow for stacking with other assistance (like MyHome) to handle the down payment portion. Conversely, programs like MyHome, MyAccess, and Dream For All are more flexible, allowing borrowers to apply funds toward the down payment, closing costs, or a combination of both, depending on the borrower’s specific financial needs at closing.

Yes, CalHFA offers the ADU Grant Program, which is distinct because it is a grant, not a loan that needs to be repaid. This program provides up to $40,000 to assist homeowners with pre-development costs (like permits, soil tests, and architectural designs) and non-recurring closing costs associated with the construction of an ADU. Since this is a grant, there is no lien recorded against your property for these specific funds. However, because it is not a loan, the IRS treats the grant funds as taxable income, and you will receive a Form 1099-G for the tax year in which the funds are disbursed.

The MyAccess Program is a subordinate loan option available exclusively when you select the CalPLUS Access first mortgage (FHA or Conventional). It provides a fixed loan amount of 2.50% of the first mortgage balance. Like MyHome, it carries a 1.00% simple interest rate and features deferred payments. The funds from MyAccess are flexible and can be used for either your down payment or closing costs. This program serves as an alternative for borrowers who may not need the full 3-3.5% offered by MyHome or who specifically want the terms associated with the CalPLUS Access loan product.

Yes, certain CalHFA programs allow for “stacking” to maximize your purchasing power. For example, if you choose a CalPLUS first mortgage, you can combine the MyHome Assistance Program (to cover your down payment) with the Zero Interest Program (ZIP) (to cover your closing costs). This layering strategy can result in a transaction where the borrower requires almost zero money out-of-pocket. However, you cannot stack every program; specifically, the Dream For All Shared Appreciation Loan cannot be combined with MyHome or ZIP. You must choose between the high-equity Dream For All path or the stacked MyHome/ZIP path.

The California Dream For All Shared Appreciation Loan is a specialized program designed to build wealth for first-generation homebuyers. Unlike standard loans with fixed interest, this program offers a loan for up to 20% of the home’s value (capped at $150,000) with 0% interest. Instead of paying interest, you repay the original principal plus a share of the home’s appreciation (equity growth) when you sell or transfer the property. Generally, if you borrow 20%, you return 20% of the appreciation. This large upfront injection eliminates mortgage insurance and significantly lowers monthly payments, but it requires at least one borrower to be a first-generation homebuyer.

The Zero Interest Program (ZIP) is unique because, as the name suggests, it carries a 0.00% interest rate. This means you only repay exactly what you borrowed, with no added interest costs. However, ZIP funds have strict usage limits: they can only be used to pay for closing costs and prepaid items, not your down payment. Additionally, ZIP must be paired with a specific first mortgage called the “CalPLUS” program (CalPLUS Conventional or CalPLUS FHA). You can choose a loan amount of either 2.00% or 3.00% of your first mortgage balance, and repayment is deferred until the loan matures or is paid off.

The MyHome Assistance Program is the standard down payment assistance loan offered by CalHFA. It provides a deferred-payment junior loan to cover your down payment and closing costs. The amount you can borrow depends on your first mortgage type. For FHA loans, you can borrow up to 3.50% of the sales price or appraised value, which covers the entire minimum down payment requirement. For Conventional, VA, and USDA loans, the limit is 3.00%. This loan carries a 1.00% simple interest rate, and payments are deferred until the loan is paid off, usually when you sell or refinance the home.