The California Housing Finance Agency (CalHFA) launched the California Dream for All Shared Appreciation loan program two weeks ago.
It offered qualified first-time buyers up to 20% of the purchase price of a house or condo, with 0% interest on the extra money.
But the shared equity program has already run out of funds and can't take on any more applicants.
“I got a lot of new client inquiries who said they were interested in this program and only this program — they wouldn't be able to buy without it,” said San Diego real estate broker Alli Urguby.
She said it's a particularly attractive program compared to other similar offerings for low and middle income households.
“Plenty got preapproved but unfortunately the funds ran out so quickly that a lot of clients didn't get to take action with it,” Urguby said.
The down payment and closing cost help was available to households whose earnings were below CalHFA’s income limit.
For San Diego County that's all the way up to $211,000, so a lot of people qualified. The situation was similar elsewhere across the state, so that drove demand much higher than the supply of funds.
Veronica Remsbottom was one of the many San Diegans who applied and was preapproved, but didn’t get the loan.
“I was really excited about it. As a single mom I've been looking to get preapproved and into my house since 2018. And yet it just keeps getting delayed for one reason or another,” she said.
Another San Diego real estate broker, Voltaire Lepe, said over the last two weeks he worked with 33 people interested in utilizing the program. Only two were guaranteed the funds.
"Most of the people that took advantage of this are all the people that were already in the process, that were already in escrow. And it was very easy for their lenders and their realtors to switch their loan product to CalHFA. Therefore, giving them basically a free gift that they weren't even anticipating," Lepe said.
Last Friday, the CalHFA website announced that all the funds “have been reserved.”
Urguby said she's telling her dozen or so clients interested in the program that all is not lost, even though the funding is gone for now.
“There are other down payment assistance programs but there's also already talk that there will be more funds coming into a program like this because it is so very needed,” the real estate agent said.
State lawmakers had set aside $500 million for the program as part of the 2022-23 budget, but a difficult economic forecast for California led to a 40% cut in funding.
The program ended up with $300 million and was expected to assist about 2,500 home buyers.
CalHFA told KPBS that additional funds are dependent on the state budget process which will play out in the coming months.
