First-generation homebuyers approved for a California home loan program

Gov. Gavin Newsom announced on June 28, that 1,700 first-generation homebuyers have been conditionally approved for the California Dream For All Shared Appreciation Loan Program.

"As part of the state's comprehensive efforts to improve affordability, build generational wealth, and unlock access to housing, Dream For All is paving the way home for thousands of Californians," Newsom said.

The program provides homebuyers with vouchers for up to 20% of a home's value for down payment and closing cost assistance.

This is the second round of the Dream For All Shared Appreciation Loan Program.

Governor Gavin Newsom said that thanks to the program, more than 2,000 California families in the first round were able to buy their first homes.

“The first round was first-come-first-serve which was great, but gone within a week,” Carley Smith, Certainty Home Lending Advisor said.

A local lender shares how she was able to get one of her clients into the very competitive California down payment assistance program during the first round of the program.

“We had to stop, drop, and apply for it immediately and lock in their interest rate that was available at the time,” Smith said.

Smith tells me the qualifications in the second round were tightened so that only first-generation home buyers could receive the vouchers.

“A lot of people's parents own homes but for a first-time home buyer the down payment is so difficult in the state of California because our downpayment is the cost of the house in most other states if you're doing 20% down in the state of California,” Smith said.

In May of 2024 alone, the median listing home price in San Luis Obispo County was $1.1 million according to realator.com, and in the second quarter of 2023, the average house price in the United States was $495,100.

Local real estate agent Gabe Davis shares what to do when you're looking to buy.

“Finding a lender and knowing what your budget is the biggest element," Davis said. "Even with a couple of minutes over the phone, a lender can tell you what your budget should be and what you're willing to spend."

“The difference with the Dream For All Programs is that it offers up to 20% down or $150,000 whereas some of the other down payment assistance programs you only get $15 to $20 thousand it just doesn't offer as much,” Smith said.

Smith continues to share other local assistance program options for those who need it; and for homebuyers who are looking for maximum financing.

She says her default is going to a USDA loan. Smith says it's only available in areas that are considered rural such as Los Osos, Nipomo, Atascadero, and Guadalupe.

“USDA will go up to 100% financing with no down payment assistance; it's just a straight 100% financing loan,” Smith said.

Smith says Golden State Finance is going to be the most lenient on the debt-to-income ratio.

“They will go up to a 50% debt-to-income ratio so that's all of your payments for housing plus anything you have on your credit report, credit cards, car payments, etc.

She advises you to do your research before making any decisions.