First-gen California homebuyers can soon apply for $150,000 down payment loans

California will focus again on first-generation homebuyers later this month during its roughly $200 million rollout of the down payment assistance program known as Dream for All.

From Feb. 24 to March 16, joint buyers including at least one first-generation homebuyer and one California resident can apply to a lottery system that, if selected, would offer up to $150,000 for a down payment loan. Single applicants also are eligible.

Also see: 300-plus assistance programs available in California

When borrowers resell their homes, the California Housing Finance Agency program requires they repay 15% to 20% of the appreciated value to a generative fund that program leaders hope will sustain Dream For All for the long run.

“As these homeowners begin to repay their loans, the funds are reinvested into the program to create a cycle that will continue far into the future, planting the seeds of generational wealth to help keep the California dream alive,” Tony Sertich, director of CalHFA, said in a statement.

This will be the third round of the now 4-year-old program that launched in March 2023.

For Fullerton native and Anaheim-based occupational therapist Deborah Jang, 30, a $140,000 Dream for All loan in 2024 allowed Jang and her husband to buy a $700,00 condominium last year in Anaheim Hills. 

“If it wasn’t for this program, I don’t think we could have even bought a home,” Jang said. “Even with our dual income and making well over $200,000, it’s nearly impossible to try to save up 20%, and then with the interest rates now and housing prices going up, that dream was getting further and further away from us.”

Orange County-based mortgage lender Rajat Jetley has worked with dozens of clients to close on homes using the program and hopes eligible applicants will continue to use its benefits.

“If you qualify this for this program, you would be a fool not to take it,” he said.

But for a state among the worst hit by a national housing affordability crisis, he’s noticed the program’s faults. The broad eligibility pool caused the funds to be swept up in days in its first year, causing some applicants to dismiss its value the following year.

This year, he’s concerned the limitations on first-generation homebuyers will neglect the realities of the intergenerational housing crisis.

“I think their thought process is that if your parents own a home, they could potentially leave it to you, which I think is just completely ridiculous,” Jetley said. “Does that mean I have to wait for my parents to die before I can have a home?”

In addition, the number of approved applicants in the program’s previous two years amounted to around 4,100 borrowing nearly $550 million, which he calls “a drop in the bucket” for a state of 40 million people.

He also said adding to the homebuying frenzy only fuels competition for supply in an already tight market.

“Is it a good program? Absolutely. In terms of solving the housing crisis, the supply side would be the side that they should really be targeting,” Jetley said.

More on for Dream for All

—To apply for the lottery, go to calhfa.ca.gov/dream/#nextsteps

—The program is open Feb. 24 to March 16.

—Call 877.9.CalHFA or 1-877-922-5432 for more instructions

—Instructions are available in Spanish, Vietnamese, Chinese, Korean and Tagalog upon requests