California's Dream For All Reopens, Offering a Shot at Homeownership

SACRAMENTO, CA – January 16, 2026 – For thousands of Californians locked out of the state's notoriously expensive housing market, a significant opportunity is on the horizon. The California Housing Finance Agency (CalHFA) has announced the return of its highly sought-after Dream For All Shared Appreciation Loan program, which will begin accepting applications on February 24, 2026. The program offers a life-changing loan of up to 20% of a home's purchase price for down payment assistance, but prospective buyers will need to act fast and understand the unique lottery-based system.

The program is a direct response to the immense challenge of saving for a down payment in a state where median home prices often exceed $700,000. By providing a substantial portion of the down payment, Dream For All aims to make homeownership attainable for first-generation homebuyers, a group that has historically faced significant barriers to entry.

“I didn’t think there was any way we could afford a house, especially in this area,” said Craig Terry, a youth program manager in Grass Valley who successfully purchased a home through the program in 2024 after being on a waiting list. “It was a waiting game. Then, it got very real, very quickly.”

His experience underscores the program's high-stakes nature. With CalHFA expecting to allocate between $150 million and $200 million for this round, demand is anticipated to far outstrip supply. This has led to the implementation of a random selection process to ensure equitable distribution of the funds. The application window will be brief, closing on March 16, 2026, at 5 p.m. PDT.

Navigating the Lottery: A Guide for Aspiring Homeowners

For those hoping to secure a coveted Dream For All voucher, preparation is paramount. The process is not as simple as submitting a name; it requires proactive steps and a clear understanding of the stringent eligibility criteria.

First and foremost, every applicant must work with a CalHFA-approved mortgage lender to obtain a DFA Lender Pre-Approval Letter before applying. This is a non-negotiable first step, as the letter is a required document for the application portal. A list of approved lenders is available on the CalHFA website.

Once the application window opens, applicants will use an online portal to submit their information. Key eligibility requirements include:

• First-Generation Homebuyer: At least one borrower on the application must be a first-generation homebuyer. CalHFA defines this as a person whose parents do not currently own, or did not own at the time of their death, a home in the United States. Individuals who have been in the foster care system also meet this criterion.
• First-Time Homebuyer: All borrowers must be first-time homebuyers, meaning they have not owned a primary residence in the past three years.
• Income Limits: Applicants must meet county-specific income limits. These vary significantly across the state, from approximately $148,000 in Del Norte County to $168,000 in Los Angeles County and up to $309,000 in the high-cost Santa Clara County.
• Credit Score: A minimum credit score of 680 is generally required, though this can vary slightly by lender and circumstances.

After the March 16 deadline, CalHFA will conduct a randomized drawing to select applicants. Those chosen will receive a voucher valid for 90 days. Within this tight timeframe, they must find a property, get a purchase contract accepted, and have their lender reserve the loan. All borrowers must also complete a mandatory homebuyer education course focused on shared appreciation loans before closing.

The Shared Appreciation Model: An Innovative but Complex Solution

What sets the Dream For All program apart is its financial structure: a shared appreciation loan. This isn't a grant or a traditional forgivable loan. Instead, CalHFA provides an interest-free loan for up to 20% of the purchase price, which can cover the down payment and closing costs. Borrowers make no monthly payments on this loan.

The repayment is triggered when the home is sold, transferred, or the primary mortgage is paid off. At that time, the homeowner repays the original loan amount plus a share of the home's appreciation in value. For most borrowers, this share is 20% of the appreciation. However, for lower-income buyers (at or below 80% of the Area Median Income), the state's share is reduced to 15%, allowing those families to retain more of their earned equity.

The primary benefit of this model is the immediate reduction in monthly housing costs. The 20% down payment often eliminates the need for costly private mortgage insurance (PMI) and results in a smaller primary mortgage. According to a 2022 report by California Forward, this structure saves the average homebuyer about $1,200 per month.

This innovative model is designed to be self-sustaining. “As these homeowners begin to repay their loans, the funds are reinvested into the program to create a cycle that will continue far into the future, planting the seeds of generational wealth to help keep the California dream alive,” said CalHFA Executive Director Tony Sertich in a statement.

However, the complexity of the model is a crucial factor for applicants to understand. The shared appreciation means the state becomes a partner in the home's financial growth. To ensure borrowers are not unfairly burdened by runaway home prices, the total repayment amount is capped at 2.5 times the original loan amount.

A Sustainable Cycle or a Competitive Gamble?

Since its inception, the Dream For All program has been a resounding success in terms of impact, assisting over 3,800 families in 2023 and 2024. Data shows it has effectively reached its target audience, with over half of all loans going to households of color and nearly 80% of borrowers earning less than $150,000 annually.

Despite these successes, the program's biggest challenge remains its popularity. The lottery system, while equitable, means many qualified and prepared applicants will not be selected. This reality transforms the application from a straightforward financial process into a competitive gamble, adding a layer of uncertainty for families planning their futures.

The 90-day shopping window for selected voucher holders also presents a significant hurdle. In California’s fast-paced real estate market, finding a home, negotiating a deal, and closing a loan in three months can be an intense and stressful race against time. While market forecasts for 2026 predict a slight moderation in price growth and an increase in housing inventory, competition for affordable homes remains fierce.

In line with Governor Newsom's directives, at least 10% of the program's funding is specifically reserved for applicants in Qualified Census Tracts, ensuring investment in historically underserved communities. As the February 24 start date approaches, thousands of hopeful Californians will be finalizing their documents and lender pre-approvals, each vying for a chance to turn the dream of owning a home into a tangible reality.