A new state lottery system to help prospective buyers purchase their first home went into effect on Wednesday.
California is giving out $250 million in down payment assistance.
The “Dream For All” program is now accepting applications online. Last year, the program ran out of money in just 11 days.
The program offers up to 20% for down payment or closing costs, not to exceed $150,000.
To sign up for the lottery go to dreamforallvoucher.org/2024.
How does the down payment assistance lottery work?
“The next round of the California Dream For All shared appreciation loan program will be focused on first-generation homebuyers and use a lottery system to ensure an equitable distribution of loans,” read a statement from the department. “Interested homebuyers can get started working with an approved loan officer or approved lender now in preparation to submit applications in April for the lottery.”
As many know, buying a home for the first time can be a challenge and for many, the hardest part is getting the down payment.
“The resources are limited, they may be saddled with debt from school or other sources, so it is a very big challenge,” said real estate agent Sarah Moore, who said now, more people are aware of the Dream for All program.
“That’s helpful because when it was first launched, there was not a good avenue to educate the buyers that are out there,” she said.
All of this comes as home sales have slowed down.
December sales were 6.2% lower than a year ago but prices are still high. Data from Zillow shows typical home values in Southern California are higher than the peaks in 2022.
In Los Angeles and Orange counties, the typical home value is just over $900,000. In Ventura County, it’s just over $831,000 and in the Inland Empire, it’s just under $560,000.
How much will I get?
The state will give up to 20% of the purchase price, or $150,000, whichever is lower. The loan will then be paid back, plus a share of the home’s appreciation whenever it sells in the future.
“When they repay this, this is going back into the program, and it’s going to allow someone else to take advantage,” said Moore. “So I feel like it’s, you know, a very reciprocal kind of thing, where everybody wins.”
Officials estimate is between 1,700 and 2,000 lottery winners will receive vouchers and will then have 60 days to spend on a home.
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