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SOLANO REAL ESTATE SCENE Dream for All – Part Two
Ihesitate to even bring this up again because I was fooled April 1st when I told all my readers and Realtor partners about the greatest down payment assistance program in history.
Our California Housing Financing Agency, or CalHFA, representative told me that they expected the $300 million to last at least 90 days. When I told the CalHFA person that based on the guidelines, I thought it might sell out in a month, her response was, “we certainly hope not.” It was gone in less than 10 business days.
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CalHFA announced a couple of weeks ago that another $200 million worth of Dream for All funds will be coming in the fall, and new guidelines will be coming, too, with no other details.
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The first batch of 20% down payments were gobbled up by a ton of buyers in the higher-end markets who took advantage of the incredible shared-appreciation program. Dream for All gave first-time homebuyers a 20% down payment with no cap on sales price or income limits for buyers who made up to $215,000 in Solano County, and substantially more in counties like Marin, San Mateo and Los Angeles.
Local Realtors and lenders helped a few lucky Dream for
Editor’s note: Solano real estate transactions were not available this week.
Jim Porter
All buyers. The maximum firstmortgage amount was only $720,200, but this allowed a buyer with $80,000 in cash to buy a house for $1 million and use that $80,000 plus the $200,000 from the state to avoid PMI and obtain a 30-year fixed-rate $720,000 loan with a payment of only $4,450 per month, which saved this firsttime homebuyer more than $1,700 per month.
Many of these first-time homebuyers were already preapproved to buy a house without the down payment assistance, but who in their right mind would turn down a $200,000 loan that required no payments or interest for 30 years in exchange for 20% of the equity that might exist when they sell the home?
These super-smart firsttime buyers could invest the $1,700 savings per month for the 30 years and get 9% on their money in the stock market and would have $3.1 million in their brokerage account. Assuming the $1 million home tripled in value in 30 years, all they would have to pay is $400,000 plus the