California has long struggled with providing enough affordable housing, especially for people looking to buy their own home.
The median home value in the Golden State reached $877,285 in 2024, according to the state’s Employment Development Department.
For the past couple years, a state-run lottery system has helped provide downpayment assistance to first-time, first-generation homebuyers. Called California Dream for All, the program provided vouchers to around 2,000 people out of around 18,000 eligible applicants last year.
The program is coming back this year, with the application window opening from Feb. 24 until March 16.
Eric Johnson is with the California Housing Finance Agency (CalHFA) which administers the program, and also works with developers, builders and municipalities to finance affordable housing for low-and-moderate income people.
Johnson spoke with Insight Host Vicki Gonzalez about how California Dream for All works.
This interview has been edited for length and clarity.
Interview highlights
Housing in California is very expensive. In Sacramento County it's “only $530,000,” which is still a lot of money. So, the California Legislature decided that they needed to take a big step.
What the Dream for All Program does — started back in 2022 — is it provides a down payment of up to 20% of the price of the home in the form of a loan. It’s a novel form of doing it called the “shared appreciation loan.” The agency will loan the home buyer up to 20% of the value of the home, and then when the homebuyer sells the home or refinances the home — in, say, five to 10 years — then they have to pay back that initial amount of the loan plus 20% of any appreciation in the value of the home.
When we started the program [CalMatters] estimated the average homebuyer would save about $1,000 on the monthly payment. Then we'd use that money that we get from the repayments to fund the next round of homebuyers. So, hopefully it becomes a virtuous circle where it just keeps on propagating itself into the future.
How has it evolved and changed in this time?
When we did the first round, we did it basically “first come, first served.” We went through the money in about 11 business days, which is really fast and quite frankly not equitable. So we made some adjustments to the program.. We had some time to adjust and then recalibrate it.
One thing we did was we made the requirement to be a first-generation homebuyer instead of just [a] first-time homebuyer. That's somebody who hasn't owned their own home in the past seven years and whose parents don't currently own their own home. Or, if their parents unfortunately passed away, then they didn’t own a home at the time of their death.
The point of the program is to really kickstart the wealth generation for California. There's a lot of people who have been unable to access the home market either explicitly through federal [or] state regulations, or implicitly — they don't have the income.
What are some other requirements to qualify?
It's available in every area of the state, there's no geographical requirement. There's income limits; in Sacramento County the income limit is $191,000 for a family. Yolo's $215,000, San Joaquin's $165,000. Those are really the two main requirements.
You also have to work with one of our approved lenders, you can't just go to anybody on the streets and get this loan. We work with people who know the loans backwards and forwards, are financially stable, and have the ability to walk people through these loans and help them out.
How does the lottery work?
What we decided after the funds for the first time went out in 11 days, we needed to make it so that it wasn't like Taylor Swift tickets and only the people who jumped in first got the opportunity to have this. So, what we decided to do was have a random selection process. You can work with a loan officer, get your application together. The application window opens on Feb. 24 and closes on March 16. It doesn't matter where you apply on any day in that window, you have an equal opportunity of being selected.
Is there a preference for some regions of California over others? Do you have better chances in one location versus another?
Not really because we allocated the vouchers, as they're going to be called, basically proportionally to the share of the population. Los Angeles has 25% of the population of California, Los Angeles is going to get 25% of the vouchers. Rural counties have 4% of the population of California, they're going to get 4% [of the vouchers.] We're really trying to make it geographically equitable so that people in, say, the Bay Area just don't use them all.
What counts as a home? Should you already have one in mind when you apply?
Anything that's zoned to single family. So, you can use a condo, a PUD [planned unit development], a townhome, a single-family home with an ADA attached. The one thing that isn't available is a duplex, fourplex, any sort of multi-family dwelling.
Actually, having a home in mind is not a great idea because if you find a great home, then you talk to a lender and they say, "sorry, you can't afford it,” then your dreams are dashed before you’ve even started. The best thing to do is talk to an approved lender at the very start.
How soon will people be notified if they've been selected? And how much time do they then have to select a home?
We've got a really rigorous audit process for this. We want to make sure that the first-generation requirement is really followed. People are going to have to submit their own birth certificate, some other documents, to testify to who their parents are. And then it's probably going to be a good two or three months after the window closes before we actually start letting people know that they've been selected.
After they've been selected they've got 90 days to find a home, and then they can apply for another 90-day extension after that.
What happens if someone’s chosen for a voucher, but there is nowhere in their region where they can afford a home?
That is something that has happened unfortunately. It's frustrating for everybody, we want people who've had this opportunity to be able to use it. And if people get the opportunity to purchase their home, they're really, really excited. If there's nothing unfortunately in the price range, then that voucher goes back into the pool. We establish a wait list and it's going to go to the next person.
How else is this program funded? And given California’s murky financial health, are you concerned about the state’s ability to continue providing the program?
It started off with an allocation for the legislature out of the state budget. The initial funding was for $500 million, and there have been a couple augmentations after that — mostly for this latest round. This last one is between $150 and $200 million.
The legislature's priorities can shift. And right now, housing is very important to the legislature [and] to Governor Newsom. They're putting their money where their mouth is with housing. You can't anticipate what's going to happen in any subsequent year, so we're doing what we have with what we have right now.
What advice do you have for someone to improve their chances of getting a voucher?
The best thing you can do [is] talk to a housing counselor. There are housing counselor agencies in Sacramento and the surrounding areas that are free, they're approved by HUD. They can walk you through all the steps you need to get to. Also talk to one of our approved under us at our website.
The most important thing is to make the first step. This is called Dream for All because we want to make dreams come true. Lots of people think, “there's no way I can do it,” but people have got a steady job. People have good credit scores, maybe don't have that nut to put for a down payment. This is exactly for you.
