CalHFA Dream For All Shared Appreciation Loan Program

CalHFA Dream For All Shared Appreciation Loan Program is a path-breaking progarm for California first-time home buyers. This is to be used in conjunction with the Dream For All Conventional first mortgage.

Upon sale or transfer of the home, the homebuyer repays the original down payment loan, plus a share of the appreciation in the value of the home (details below).

How Can I Qualify for CalHFA Dream For All Shared Appreciation Loan Program?

• Be a first-time homebuyer.
• Occupy the property as a primary residence; non-occupant co-borrowers are not allowed.
• CalHFA borrowers must complete two levels of homebuyer education counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.
• Meet CalHFA income limits for this program (see next section).
• Must be buying a one-unit property (Single-Family, Townhomes, Approved Condominimums, and Manufactured Homes).

What is the CalHFA Income Limits for this Program?

The income limits vary by county. It is as high as $300,000 for Marin, San Francisco, San Mateo, and Santa Clara counties. Alameda, and Contra Costa counties are close behind at $282,000. On the other side of the spectrum we have several counties with an income limit of $159,000, namely Colusa, Del Norte, Fresno, Glen, Humboldt, Imperial, Kern, Kings, Lake, Lassen, Madera, Mariposa, Mendocino, Merced, Modoc, Siskiyou, Stanislaus, Sutter, Tehama, Trinity, Tulare, and Yuba.

Get the full list of all the California counties income limits here.

How does the Shared Appreciation work?

CalHFA Dream For All Shared Appreciation Loan Program works differently than a regular mortgage.

The program has two different Shared Appreciation Loan Terms, which are as follows:

Scenario 1: For borrowers with income above 80% AMI and less than or equal to the CalHFA Income Limits, there is a 1:1 program appreciation share which works as follows:

The Shared Appreciation Loan provides up to 20% down payment and shares up to 20% of the home price appreciation.

• Example:
  $500,000 (A): The original sales price / original appraised value of the subject property
  $100,000 (B): 20% of the sales price that the borrower receives as a Shared Appreciation Subordinate LoanAt the time of sale / refinance / other transfer, the market value of the property is $640,000.
  $640,000 (C): market value of the property
  $140,000: Appreciation of the property (C – A)
  $28,000 (D): 20% of Appreciation of the propertyHence, at the time of sale / refinance / other transfer, the borrower owes the following amount to CalHFA:
  $100,000 (B) + $28,000 (D) = $128,000

Scenario 2: For borrowers with income less than or equal to 80% AMI, there is a reduced 0.75:1 program appreciation share which works as follows:

The Shared Appreciation loan provides up to 20% down payment and shares in up to 15% of the home price appreciation

• Example:
  $500,000 (A): The original sales price / original appraised value of the subject property
  $1,00,000 (B): 20% of the sales price that the borrower receives as a Shared Appreciation Subordinate LoanAt the time of sale / refinance / other transfer, the market value of the property is $640,000.
  $640,000 (C): market value of the property
  $140,000: Appreciation of the property (C – A)
  $28,000 (D): 20% of the Appreciation of the property
  $21,000 (E): 0.75% of $40,000, Program Share of AppreciationHence, at the time of sale / refinance / other transfer, the borrower owes the following amount to CalHFA:
  $1,00,000 (B) + $21,000 (E) = $121,000

What is the Interest rate of CalHFA Dream For All Shared Appreciation Loan Program?

Interest rates will vary depending on your financial circumstances, lender fees, and other factors. Interest rates can also change daily. We recommend that you contact us to receive an accurate rate quote for this program.

How Can I Apply for CalHFA Dream For All Shared Appreciation Loan Program?

InstaMortgage, an FHA approved lender, can help you qualify for the loan, guide you on the loan process, shop for the best interest rates, and help you secure the loan. Contact me today at shashank@instamortgage.com to get started on your homeownership journey.

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