Owning a home every day becomes an impossible dream for many working families in California, even those with moderate incomes. The lack of money to make a down payment prevents, in many cases, the dream of having a home of one’s own.
The California Housing Finance Agency (CaldHFA) in Spanish the California Housing Finance Agency has launched a program so that families can finally buy their own home.
During the conference: “Every family deserves the opportunity to create generational wealth, but how?”, organized by Ethnic Media Servicesprogram experts California Dream for All They shared how to get first-time buyers to purchase a home.
Eric Johnson, spokesman for the Communications and Marketing Division of the Housing Finance Agency, He said there are many people in California who have good income, good jobs and credit, but have not been able to save for a down payment.
He noted that they also do not have the benefit of intergenerational wealth, or having their parents or grandparents pass them a house.
“Many members of the African American, Asian American, Latino and Native communities have not had that advantage.”
He said this program will boost that energetic generational wealth that being a homeowner can really bring to them.
“The program gives you a loan of up to 20% of the purchase price, or $150,000, whichever is less. And what that means is that if you buy a house for, say, $600,000, we’ll get you a loan of up to $120,000.”.
He explained that this means the amount of your first mortgage, which is the amount you pay each month, will be reduced.
“Therefore, he mentioned that the price will be reduced from 600,000 to 480,000. This will mean they won’t have to pay mortgage insurance on their loan, which can add quite a considerable amount to their mortgage payment each month.”
What will happen is that they must return that 20% when they sell or refinance the house.
Johnson asked to review the page: https://www.calhfa.ca.gov/dream/ to find all the details and how the program works.
“This program is designed to really reach into the very distant future and maintain this lease and this financing with this initial capital.”
The requirements
The spokesperson said that to receive this loan, people must be first-time buyers, meaning they cannot have occupied their first home in the last three years.
“At least one person on the loan has to be a California resident right now.”
He emphasized that a first-generation buyer is someone who has not owned their first home in the last seven years and whose parents do not currently own a home; or who were not owners at the time of his death.
“They can also be part of this program, if they were ever in the home care system.”
He revealed that there are limits on income to benefit from this program.
“For example in Los Angeles, the limit is $150,000, in San Diego, $85,000 and in Alameda County, $234,000.”
He specified that this is a loan for moderate to low-income home buyers.
“What we are going to do is we will do a lottery in the first round of financing. At first, we gave them to those who came first, which was necessarily an inequitable way to distribute the money. For this round, we are going to have a lottery between April 23 and April 29.”
He said they want people to have enough time to contact one of the approved lenders, and the buyer has their approval letter and can put it along with other documents on their website to enter the lottery.
“What happens is that once we have all the applications, we will draw names at random. The lottery will be 100% digital, and the selectors will be notified that they will receive their voucher.”
They can then use that voucher with one of their approved lenders and have 90 days to find a home and use the $150,000 for the program.
“There is time to prepare your application. There’s still a month and a half left. And as long as you submit it between April 3 and April 29, you will have exactly the same chance of being selected.”
He said there is no age limit to apply, only that they have an income.
An opportunity to have your own home
Maeve Elise Brown, executive director and founder of the organization Housing and Economic Rights Advocates (HERA), said that this program gives people the opportunity to acquire a state loan, since it is a real challenge to buy a home at a time when the average price is $756,000.
“Last year, about 46% of African Americans were homeowners nationally compared to 74.4% for Caucasian residents; and other data indicates that this group was able to access $10,000 from their parents to invest in buying a house.”
She mentioned that another headwind is that the large amount of debt that people of color and women have impacts the ability to buy a home and make payments.
“A tool like what California offers is very exciting to me to be able to purchase the family home and then keep it.”
He stated that his services are free for anyone.
“We work on household debt and credit problems so they can reactivate their credit in preparation to look for housing, without any down payment.”
Factors against
Realtor Ria Cotton-Landry, owner of Ria Cotton Realty and president of the National Association of Realtors, said homeownership rates are declining.
“Credit is a factor against it because the credit score of African Americans nationally is around 695, and if we see that the California Dream for All program asks for 680 or 700 points, then we have work to do to prepare credit of buyers and working with lenders.”