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from my understanding of this you can think of it as california giving you a 20% discount to buy a home so just think of the whole price for the house as 80% cost only. that 20% was never your money to begin with so with home appreciation dont even think about getting interest for that money. when you sell your home your own money you put in is 80% so it is just right that you get your money's worth only instead of being greedy and say that 20% was yours too. just be happy you can buy a house for 80% the cost instead of 100%
I don’t understand the chart here. How did you get the numbers in the end (red) or how the 20% appreciation affects the overall cost. You also don’t talk about closing costs that are much higher with DFA.
The example is an 84 month comparison of repayment showing how much more you would pay in monthly payments with either of the 3 options versus repaying 20% of your appreciation after 7 years assuming 4% appreciation (which could obviously be lower or higher). There's no 2 ways around the closing cost issue. 99% of traditional loans are done with lender paid compensation, meaning the mortgage originator is paid by the lender, not the borrower. Down payment assistance programs (and ALL CalHFA programs) are more commonly borrower paid where the borrower is responsible for paying their loan officer which makes them considerably more expensive. If you assume $10k difference, which should be to the high side, the Dream For All is still going to be the obvious choice for anyone who is eligible and is selected for a voucher. The payment is significantly lower. The borrower qualifies for far more property. The re-payment will be less than paying monthly as you go with a traditional loan unless you get exceptional levels of appreciation going forward, which would be a good problem to have. Hope this helps and thanks for watching.
It's a unique program and not surprising that it's hard for people to grasp that while the money isn't free, it's probably as cheap of money as you'll ever get.
But my question is how much more is it over time? Because if you don't have the lump sum in 7ys, you then have to do a refinance. There is fees on a refinance, you will be paying interest on that amount, plus the appreciation you gave to the state.
How much more is what over time? The only trigger that requires you to pay off the loan is the 1st mortgage being paid off in 30 years. If you don't sell or refinance, there is no requirement to pay off the 2nd. The numbers speak for themselves. If you are fortunate enough to win a voucher, take the money and run. Most people won't have that option unfortunately due to limited funds from the state.
@@joshlewisCMC In 30yrs, when the 1st is paid off and you don't have the lump sum, then a you have to get somekind of loan from the equity to pay. That requires having to pay interest, as well as the appreciation sum. Here in San Francisco the Dream Keeper amount is up to $500K.
The correct question is how much more than what? More than renting. Figure out what the rent is going to be in 30 years versus what the new mortgage would be for paying back the appreciation that you benefited from for the last 30 years. No one is forcing anyone to take the program but anyone that doesn't understand the benefits of it over time fails to understand the time value of money and the impact of inflation.
@@joshlewisCMC It's only beneficial if you have the lump sum plus appreciation at the end of the 30yr term or at a refinance. If you are going to end up having to finance it anyway, it might not be a benefit to take it.
incredible info a realtor was trying to tell me that its a bad deal and that its the govt's way of getting into the home game like corporations. They compared it to federal student loans. I think they just didnt like tax dollars being used to help people, especially in DFA case where it is mostly immigrants due to the first gen buyer requirement
Lots of people have crazy takes....this won't be a big money maker for the state but I also don't think it's going to be a big cost to the state. My biggest issue with it is that if only ~300 families in the state get to use the program every year, should we even be doing it at all? That being said, if you qualify and you win a voucher, I'd absolutely take the deal. Thanks for watching!
DFA's advantage is not having to come up with big upfront cash. Other than that, you will pay back the loan and appreciation through sell or refinance either way without forking over upfront cash at that time. It'll just be added to your existing loan. If you can afford it by that time, the program is incredible and gets you into a home quicker and way cheaper monthly. I think there's more good to it than there is bad. You're not really even forking over hard earned cash. You're financing the original loan and appreciation on top of existing loan. Doing FHA loan is horrible because that PMI is going to be max no matter your credit. The monthly payments will eat up your wallet. I'd rather save a couple hundreds monthly and worry about the DFA loan later when I'm more established and earn higher wages.
1. You can get in with no money out of your pocket 2. You qualify for more home 3. You have a lower payment 4. You repay less over time unless you see MASSIVE appreciation which would still be a win. I'm not a big fan of CalHFA programs but this one is a no-brainer if you are eligible and can win a voucher.
@@joshlewisCMC agreed but the monthly payments with 20% down is so much lower than 3.5% with premium rate of PMI. To me, most people see monthly costs as one of the main factors. The difference between paying 2200 vs 3000 a month is way important. The average family doesn't care for all the appreciation and equity if they don't plan to sell. With today's market, I don't see the dream home scenario anymore. People are settling with what they have. So while i agree with you on those points, the monthly payments with DFA truly saved you a bunch of money.
Can anyone explain what happens if you get into this program and keep your house forever and then pass it to your children after you die? Are you required to live in the house or can you rent it out at some point?
The Dream For All 2nd mortgage is due and payable when the 1st mortgage is paid in full. You can keep the house and do whatever you please with it but you will need to pay back the assistance at that point.
It is a possibility, however remote over that long a time frame. You would owe the original principal balance. Since there would be no appreciation, there is no shared appreciation to pay.
Multiple data sets released every month reflecting home prices. Trajectory hasn't changed in about 2 years. There were 425 vouchers issued. Even in a slow year 250k homes sell in California. Tears in the rain my friend.
@@joshlewisCMC Supply and demand Einstein.., but just to clarify , the taxpayer gives these people no interest loans and gets repaid as long as the housing bubble doesn't burst , but you still get paid .., kudos, good scam Josh.
Yes, juicing the demand for that .17% of the market that qualified caused California prices to skyrocket the last 2 years. And yes, it's really weird that people do a job and get paid for doing it. Quite the scam indeed! If you don't like the program, elect better state government. Your anger is misdirected. Have a great night.
What for really where so i can apply haha im an immigrant been in the USA for 21 year and for 5 years i been paying 8,000 every year in taxes more then turmp and now you saying i can't get help haha come on think first people
You need to be pre-approved by a CalHFA approved lender, complete the 1 hour online shared appreciation training, and complete the CalHFA application to be entered into the voucher lottery. Hope this helps!
Never cut off your nose to spite your face. You get 80% of the profit. Hating Newsom isn't a reason to forego a benefit, no matter how distasteful you may find him.
I'm not sure how giving someone use of a 20% down payment for up to 30 years with no monthly payments and the only repayment coming IF you make money on the home can be considered predatory...
Agree ,what happens when there's a downturn in the economy, home values plummet, and job losses results in foreclosures of these properties. Who get left holding the bag ?
