California is relaunching a program offering $250 million in down payment assistance to help first-time homebuyers achieve their dream of homeownership. Last year, a similar program with $300 million ran out of funds in just 11 days, demonstrating the high demand for this type of assistance. The California Housing Finance Agency is changing the program this year to reach a more diverse group of borrowers and will use a lottery system instead of a first-come, first-serve basis for distribution of loans.
The down payment assistance lottery is aimed at first-generation homebuyers, offering a shared appreciation loan that will be distributed through a lottery system. The goal is to ensure an equitable distribution of loans and reach a larger pool of potential homebuyers. The program is designed to address the challenge of getting a down payment, especially for those who may be saddled with debt from school or other sources. Officials estimate that between 1,700 and 2,000 lottery winners will receive vouchers and have 60 days to spend on a home.
In response to slowing home sales but high home prices, the state will give up to 20% of the purchase price, or $150,000, whichever is lower. The loan will then be repaid, along with a share of the home’s appreciation when it sells in the future, creating a reciprocal system to benefit future potential homebuyers. For more information on how to apply for the program, interested individuals can visit the California Housing Finance Agency’s website.