California Dream For All Shared Appreciation Loan Explained

• Offers up to 20% down payment help, up to $150,000
• No monthly payments on the second loan
• State shares part of the home’s future value growth
• Must meet first generation homebuyer rules
• Lottery system used for 2026 funding
• Income limits vary by county
• 2.5x cap limits how much appreciation you repay

The California Dream For All Shared Appreciation Loan Program is a down payment help program created by the California Housing Finance Agency. It is designed to help first generation homebuyers buy a home in California.

This guide explains how the program works, who qualifies, and what to consider before applying.

What Is the California Dream For All Program?

The Dream For All program is a shared appreciation loan.

This means:

• The state gives you money for your down payment
• You do not make monthly payments on that loan
• When you sell or refinance, you repay the loan
• You also repay a share of the home’s value growth

Key features:

• Up to 20% of the purchase price
• Maximum loan amount of $150,000
• 0% interest
• No monthly payments
• Must be used with a CalHFA first mortgage

This is not a grant. It must be repaid later.

How Shared Appreciation Works

The program gives you up to 20% for your down payment. In return, the state shares in your home’s future value growth.

There are two income groups:

• Above 80% of Area Median Income
  • State takes 20% of the net appreciation
• At or below 80% of Area Median Income
  • State takes 15% of the net appreciation

Example:

• You buy a home for $500,000
• You receive $100,000 from the program
• Later, you sell for $700,000
• Net appreciation is $200,000

If you are above 80% AMI:

• 20% of $200,000 = $40,000
• You repay $100,000 plus $40,000

If you are at or below 80% AMI:

• 15% of $200,000 = $30,000
• You repay $100,000 plus $30,000

Important protection:

• Repayment of appreciation is capped at 2.5 times the original loan amount

This helps protect you in fast rising markets.

If the home does not increase in value, you still repay the original loan amount, but no appreciation share is added.

Who Can Qualify?

The program is aimed at first generation homebuyers.

To qualify:

• You must not have owned a home in the last 7 years
• Your parents must not currently own a home in the United States
• If parents are deceased, they must not have owned at the time of death

Other requirements:

• At least one borrower must meet the first generation rule
• All borrowers must be first time homebuyers
• Minimum credit score is usually 660
• Debt to income limits apply
• You must meet county income limits

Income limits vary by county. Higher cost counties have higher limits.

The application requires detailed parental information. Providing false information can lead to serious legal issues.

2026 Lottery System

The first round of the program ran out of funds quickly. Because of high demand, the state moved to a lottery system.

For 2026:

• Registration opens February 24, 2026
• Registration closes March 16, 2026 at 5 PM PDT
• All complete applications are entered into a random draw
• Selected buyers receive a voucher
• You have 90 days to find a home and lock funds

At least 10% of funds are set aside for buyers in Qualified Census Tracts.

This helps support buyers in lower income communities.

When Do You Repay the Loan?

The loan becomes due when:

• You sell the home
• You refinance the first mortgage
• You transfer title
• You pay off the first mortgage

There is a one time resubordination option if you refinance into another CalHFA loan.

Conditions include:

• Rate and term refinance only
• No cash out
• $400 fee

If rules are not followed, the loan becomes due.

Required Homebuyer Education

Before closing, you must complete:

• An 8 hour homebuyer education course
• A 1 hour shared appreciation course

Only one occupying borrower must complete the courses, but it is wise for all borrowers to attend.

Education is required because this program affects your long term wealth and financial planning.

Pros and Cons to Consider

Pros:

• Large down payment support
• No monthly payment on the second loan
• Lower monthly mortgage payment
• May remove private mortgage insurance
• Helps first generation families build wealth

Cons:

• You share part of future home value growth
• Less equity in early years
• Must meet strict eligibility rules
• Funds are limited and competitive

This program can be helpful, but it is not right for everyone.

Is This Program Right for You?

This program may make sense if:

• You cannot save a large down payment
• You plan to stay in the home long term
• You understand shared appreciation
• You meet first generation rules

You should review:

• Your long term housing plans
• How long you expect to own the home
• How repayment will affect your future move

Consider speaking with a CalHFA approved lender and a trusted financial advisor before making a decision.

Housing decisions affect your financial future. Make sure you fully understand the shared appreciation structure before applying.

The California Dream For All Shared Appreciation Loan Program offers a path to homeownership for many families who would otherwise be locked out of the market. With proper planning and education, it can be a strong tool for building long term stability in California.

California Dream For All Income Limits by County

The program sets maximum household income limits based on the county where the property is purchased. These limits are reviewed annually and are a strict eligibility requirement. Total household income is used, not just the income applied toward the mortgage.

Source: California Housing Finance Agency, Dream For All Shared Appreciation Loan 2025 income limits (Income Limits.pdf)