…Ran Out Of Money In 12 Days
Demand for California’s new downpayment assistance program overwhelmed the system and depleted its $300 million budget in less than 12 days, with applications put on pause effective April 7, according to the housing finance agency.
An ‘open house’ flag is displayed outside a single family home in Los Angeles on Sept. 22, 2022. (Allison Dinner/Getty Images)
The legislator responsible for proposing the program responded optimistically to the news.
“It is incredible and inspiring to see that the launch of the California Dream for All program has already been so successful,” Senate President Pro Tempore Toni Atkins (D-San Diego) said in a statement April 14. “The fact that it has helped more than 2,400 first-time homebuyers with their down payments in its first two weeks is terrific.
Designed to provide up to 20 percent of funding for low-income first-time home buyers, the “Dream for All” program was initiated with the passage of Assembly Bill 140 in 2021.
Resources are provided through the Dream for All Shared Appreciation Loan, in which the state provides a portion of the down payment in exchange for a share in the property.
The loan, in addition to a portion of the appreciated value of the home, will be repaid when the property is resold, according to the legislation.
A sign is posted in front of new homes for sale at Hamilton Cottages in Novato, Calif., on Sept. 24, 2020. (Justin Sullivan/Getty Images)
The lowest eligible income for the program is $159,000 for several counties throughout the state, with San Franciscans and Silicon Valley residents in Santa Clara and San Mateo residents eligible if they make $300,000, the highest. Los Angeles’s limit is $180,000, and Orange County has the highest income limit in Southern California, at $230,000.
The original text written in 2021 proposed funding the project with $1 billion annually for 10 years. The proposal suggested the $10 billion invested would assist more than 150,000 Californians.
After legislative wrangling, the proposed amount later dropped to $500 million in 2022 and with the state facing a $25 billion budget deficit for the next fiscal year starting in July, Newsom decreased the allocation to $300 million for its introduction in 2023.
The funding gap leaves the program stalled awaiting further resources, according to legislators.
“While we are off to a strong start, we can’t truly make a difference in opening the doors to building generational wealth for Californians—especially those who historically have faced systemic barriers to homeownership—without sustained funding for the program,” Atkins said in the statement.
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