Citizens Financial: CalHFA ‘Dream For All’

Citizens Financial is proud to support the CalHFA Dream for All Program, which offers different loan options to help make homeownership more accessible for low- to moderate-income families in California. The program features three different loan types, including a Required First Mortgage, a Dream For All Conventional First Mortgage, and a Dream For All Shared Appreciation Loan, which we will discuss in more detail below.

The Dream For All Shared Appreciation Loan is a second lien loan that provides up to 20% of the sales price or appraised value (whichever is less) to eligible borrowers. The loan works by sharing in the appreciation of the home’s value upon sale or transfer of the property. There are two different shared appreciation loan terms, each with its own unique features and benefits, as outlined below.

Scenario 1: Borrowers with income above 80% AMI but less than or equal to the CalHFA Income Limits are eligible for the 1:1 program appreciation share. This means that the Shared Appreciation Loan provides up to 20% down payment and shares in up to 20% of the home price appreciation. For example, if the original sales price of the home is $500,000, the borrower could receive a Shared Appreciation Subordinate Loan of up to $100,000 (20% of the sales price). If the market value of the property increases to $700,000 upon sale or transfer, the appreciation in the value of the home would be $200,000. The borrower would owe CalHFA $140,000, which is the original down payment loan of $100,000 plus 20% of the appreciation, or $40,000.

Scenario 2: Borrowers with income less than or equal to 80% AMI are eligible for a reduced 0.75:1 program appreciation share. This means that the Shared Appreciation Loan provides up to 20% down payment and shares in up to 15% of the home price appreciation. For example, if the original sales price of the home is $400,000, the borrower could receive a Shared Appreciation Subordinate Loan of up to $80,000 (20% of the sales price). If the market value of the property increases to $600,000 upon sale or transfer, the appreciation in the value of the home would be $200,000. The borrower would owe CalHFA $110,000, which is the original down payment loan of $80,000 plus 15% of the appreciation, or $30,000.

It’s important to note that the Dream For All Shared Appreciation Loan cannot be combined with other CalHFA Programs such as CalPLUS ZIP or MyHome. Additionally, the minimum FICO score requirement for this loan is 660, and the minimum combined loan-to-value (CLTV) ratio is 70%, while the maximum CLTV ratio is 105%.

If you’re interested in exploring your options with the CalHFA Dream for All Program and the Dream For All Shared Appreciation Loan, we encourage you to contact a Citizens Financial loan officer today. Our team can help you understand the program’s requirements, guide you through the application process, and help you find the loan that’s right for your unique situation.

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