State program for first-time home buyers doles out $300M in two weeks

A state fund with $300 million to help first-time home buyers has emptied out in two weeks.

The California Housing Finance Agency’s loan program, which launched two weeks ago to help 2,300 home buyers with their down payments, is now out of cash, the Los Angeles Times reported.

The program, dubbed California Dream for All Shared Appreciation, offered free cash for qualified first-time buyers for up to 20 percent of the purchase price of a house or condo.

The help was available only to households whose earnings were below CalHFA’s income limit, or $180,000 in Los Angeles County and $235,000 in Orange County. 

State lawmakers had set aside $500 million for the program as part of the 2022-2023 budget, but a looming fiscal shortfall led Gov. Gavin Newsom to propose a 40 percent cut.

So when CalHFA launched the program late last month, it was allocated $300 million and expected to assist 2,300 home buyers. 

On Friday, the CalHFA website announced that all the funds “have been reserved” – finance-speak for out of cash.

More funds will be available to the program at a later date, said Kathy Phillips, spokeswoman for the Housing Financing Agency. 

“However, we cannot predict whether that will be in the coming months with an additional allocation [from the state budget], or in the coming years as repayments of these original loans come back to be recycled to help additional households,” Phillips said.

She said the program was designed to recycle money for loans, but that won’t begin until the current loans get repaid. 

— Dana Bartholomew