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“CALIFORNIA DREAM FOR ALL” OVERVIEW 👀

This is the newest program offered by the California Housing Finance Agency (AKA – CalHFA). This program is a REVOLVING SHARED APPRECIATION LOAN PROGRAM, meaning that as buyers who used the

program sell/payoff those funds earned by “CalHFA’s Shared Appreciation” will add to the Shared Appreciation Budget for future qualified buyers.

The program is designed to help create homeownership for low to moderate income Californians and especially those struggling with down payments. A qualified buyer could obtain 20% of said purchase price (ie: $500K @ 20% = $100K) to be used for DOWN PAYMENT AND/OR CLOSING COST, not to exceed 105% Combined Loan to Value. The “California Dream For All” 1st lien is designed to aid First Time Homebuyers (AKA: FTHB – See further detail of definition below) be used in conjunction with the “California Dream Shared Appreciation Loan”. This 2nd Shared Appreciation Lien is deferred and shall have NO Payments until the 1st lien reached maturity at which point you as a borrower will pay a percentage of appreciation back to the “Dream for All” state fund. Learn more below…

❓❓ARE YOU ELIGIBLE❓❓

While there is quite a bit of information with this program, we’d like to highlight the 30,000 foot elevation overview so that you can determine if this program might be right for you, your client or someone you know. There will certainly be more information specific to your scenario that could prompt further questions and we invite you to head those up with us and/or refer to links provided below.

✅FIRST TIME HOMEBUYER “FTHB”
Means you have NOT owned and occupied a home in the past 3 years. There can be more detail behind this so please ask for more info should scenario be out of the box.

✅MEET CREDIT SCORE REQUIREMENTS
Currently the program minimum requires a buyer to have a 680 score

✅MEET INCOME MAX LIMITS
The income limits are based on two variables – either under or over 80% of the “Federally Deemed Area Median Income” but also not greater than what CalHFA’s Income Overlays are at present. Refers to links below. Do know that the payback percentages are lower if your income falls below 80% of Area Median Income you could only need to payback 15% of the appreciation at time of maturity. Ask us for more detail…

✅INTENDING TO BUY A PRIMARY RESIDENCE? This program is only allowed to be used to finance a “Owner Occupied” home as their “Primary Residence”.

✅DEBT RATIO REQUIREMENTS
We can help clarify how to interpret these program guidelines and how they might differ from that of a traditional agency guidelines and how the qualifications are tighter. Qualification is always going to evaluate risk and the higher the debt ratio from a consumer/buyer the higher the risk. With that, property type can carry higher risk, for example with manufactured homes. The debt ratio max requirement is 50% with the exception of higher risk scenarios with property type and/or credit score the max may be 45%. Inquire for more information.

✅ARE YOU WILLING TO TAKE A CUMMULATIVE 9 HR BUYER EDUCATION COURSE?
These are both Mandatory and quite informational to ensure you understand details not only in the homebuying process beyond what we provide but also a deeper dive into the Shared Appreciation Loan.

❓❓COMMON Q&A’S ❓❓

✅WHAT ARE THE TERMS OF THE LOANS?
The 1st lien is a 30 year fixed loan. Payment

✅WHAT IS THE INTEREST RATE ON THE “SHARED APPRECIATION LOAN”?
There is no interest rate set or accumulated during the timeframe you hold the loan, but rather you pay 20% of the appreciation portion compared to that of the original principal deferred “shared appreciation” loan — examples provided in video.

✅DO YOU NEED TO MAKE PAYMENTS ON “SHARED APPRECIATION LOAN”
No, you do not need to make payments on this “deferred” loan however you are permitted to do so should you want the balance to be lower at time of future maturity. Payments again on this loan ARE NOT due until the 1st 30 year lien is paid off–so it’s deferred for the term of the 1st lien.

✅WHAT IS THE MAX SHARED APPRECIATION LOAN?
The max shared appreciation loan is 20% of the sales price or appraised value, whichever is less.

✅CAN I OBTAIN A “CALI DREAM APPRECIATION 2ND LOAN” WITH ANY 1ST LIEN MORTGAGE?
You may only combine this 2nd lien with the CalHFA Dream For All First Mortgage.

✅IS THIS ONLY AVAILABLE IN CALIFORNIA?
Yes, this program is only available in California.

✅WHAT CAN I USE THE SHARED APPRECIATION LOAN FOR?
The loan can be used for Down Payment up to 20% and/or Down Payment + Closing Costs. The

✅WHEN RATES COME DOWN, CAN I REFINANCE TO LOWER THE 1ST LIEN RATE?
Knowing that rates are higher as of now than they have been and as rates lower naturally you’d want to lower your rate/payment. Knowing the program requires payback of the “2nd Shared Appreciation Loan” if you sell, refinance or payoff your 1st lien that you may not have the ability to payoff the 2nd lien. If this comes into play may not allow the loan to be subordinated. Inquire with us for more info.

✅IS THERE A CAP I COULD OWE IN SHARED EQUITY?
Yes, there is a cap which is set at 2.5X the original “Shared Appreciation Loan” (ie: $100K X 2.5 = $250K). Worst case you’d pay this back + original loan; however at an average rate of 4% market appreciation it’s unlikely that this will occur and should be deemed as worst case scenario.

KNOW & UNDERSTAND THESE FEATURES ❓❓

👀SLIDES TO REFERENCE FOR THE MATH PORTION👀

🔗Moderate Income: https://www.calhfa.ca.gov/dream/images/dfa-moderate-income.png
🔗Low Income: https://www.calhfa.ca.gov/dream/images/dfa-80-AMI.png

👀PRODUCT LINKS & OTHER DETAILS👀

🔗Buyer Counseling Standard – Required
👉Online: https://calhfa.ehomeamerica.org/sponsor_user/sponsor_main
👉In Person: https://www.hud.gov/findacounselor
🔗Dream For All Required Education – Additional Supplemental Required
👉 https://www.calhfadreamforall.com/
🔗Income (*Below 80% AMI can yield lower shared appreciation from 20% to 15%)
👉https://www.calhfa.ca.gov/homeownership/limits/index.htm
👉 https://ami-lookup-tool.fanniemae.com/amilookuptool/
👉 https://www.calhfa.ca.gov/homeownership/limits/income/income.pdf
🔗Shared Appreciation Loan – Details
👉https://www.calhfa.ca.gov/dream/index.htm
👉Note Example: https://www.calhfa.ca.gov/homeownership/forms/note-cadfa.pdf
👉Deed Example: https://www.calhfa.ca.gov/homeownership/forms/deed.pdf
👉Disclosure Agreement: https://www.calhfa.ca.gov/homeownership/forms/disclosure-dfa.pdf
🔗Buyer Info:
👉https://www.calhfa.ca.gov/dream/index.htm?utm_medium=email&utm_source=govdelivery
👉Interest Rate: https://www.calhfa.ca.gov/apps/rates/
🔗AB-140 Bill Info: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB140

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