By Dianne Anderson

For anyone who thinks homeownership is out of reach, housing experts, state officials, and community advocates are looking to help fresh-faced buyers get in the door, and it’s a lot easier than it sounds.

Starting February 24, applications open and run until March 16, as the clock is ticking for first-generation homebuyers in underserved communities of color.

Sandy Close, director emeritus of American Community Media (ACoM), recently led a panel of CalHFA officials and brokers serving Black, Latino and Asian communities. They covered how first-generation homebuyers can access the down payments needed to start building long-term family wealth.

“Even as affordability worries grow and housing costs soar, this program is a bright spot for would-be first-generation homebuyers, particularly in long-underserved ethnic minority and immigrant communities,” Close said.

Thousands upon thousands of renters already have decent credit scores and steady incomes needed to qualify, but CalHFA spokesperson Eric Johnson said they still haven’t been able to save up the enormous amount of money required for a down payment.

Through the Dream For All Program, between 1,500 and 2,000 beneficiaries will get a voucher for up to 20% of a home’s purchase price for down payments and closing costs. It can make their monthly mortgage payments much lower.

“And with housing prices being what they are, a down payment can be a fairly significant hurdle. People haven’t saved up five, sometimes even six digits in their bank account to make that down payment. So what Dream For All does is it loans people up to 20 % of the value of the home for that down payment,” said Johnson, Information Officer with CalHFA.

Assistance for downpayment is capped at $150,000, and the homebuyer must register for a voucher, which isn’t first-come, first-served. In a randomized drawing, selected registrants will receive the voucher.

Everyone has the same chance in the random selection process, but only if they apply in time.

“And so many families, people, different races, ethnicities have been essentially frozen out of homeownership in the United States and in California. I could quote you all kinds of horrible statistics. The one that really gets me is in the Black community. The homeownership rate right now is less than it was in 1968 when the Fair Housing Act was first passed. Not a lot has changed,” Johnson said.

Because so much of family wealth is locked up in a home, he said homeownership is an important generational wealth-building tool.

According to the latest Federal Reserve Survey of Consumer Finances, the difference in net worth between those who own and those who rent is staggering. The median net worth of homeowners is about $396,200 compared to the median net worth of renters at about $10,400.

The Dream for All Program defines a first-generation homebuyer as someone who has not owned a home in the past seven years, and whose parents do not currently own a home in the United States.

Southern California broker Shanta Clark said that renters are feeling pressured as landlords look to sell their rental properties to investors. Tenants can act fast with programs like the Dream for All voucher, which is also a tool to avoid rental displacement from a sudden sale.

Clark stressed that many families are already paying high rent, often pushing over $4,000, proving they can afford monthly costs, but they don’t have the huge amount needed for a down payment.

For those who may not be selected in the drawing, there are many other helpful programs. Some people think that the programs take too long, which she said is not true.

“I’ve done these Dream for All programs and other CalHFA programs in 30 days or less,” said Clark, senior loan consultant and broker. “That means homeownership can be possible in 30 days.”

Panelists also highlighted CalHFA’s MyHome and ZIP, the Zero Interest Program, as alternatives to Dream For All. MyHome offers a deferred Silent Second Loan to cover down payments or closing costs, and CalPLUS combined with ZIP covers 2-3% in closing costs.

When stacked with local city or county assistance, it can reduce out-of-pocket expenses to almost zero.

Tiffany Duvernay-Smith, a program beneficiary, said her journey toward homeownership, and applying was a leap of faith. Despite a lot of bumps along the way, she took the chance.

She is an advocate and working for a government agency. She talked about her transition from homelessness to how the Dream for All program helped her get around barriers to entry.

As a Black woman, she said it was also important to work with someone who looked like her, Shanta Clark, who then referred her to an African American Realtor to help her through the process.

Duvernay-Smith hopes other buyers will have access to someone as encouraging as Clark, but she emphasized first-time homebuyers should take the steps, take the classes, work on their credit score, believe, and just do it.

“What I want people to really understand is that the answer is already no. It’s already not going to happen for you, but as soon as you apply, there is a 50% chance that the answer is yes. But the answer will never be yes if you don’t actually apply,” she said.

For more information, see:

Official Program Portal: calhfa.ca.gov/dream

Approved Lender List: calhfa.ca.gov/homebuyer/lenders.htm

Income Limits by County: calhfa.ca.gov/homebuyer/limits.htm

HUD-Approved Counseling: hud.gov/findacounselor