Dream For All Explained (2026) | California Down Payment Program, Eligibility, Repayment
For many Californians, the biggest barrier to buying a home isn’t monthly payments — it’s the down payment. The Dream For All program, operated through CalHFA, is designed to remove that barrier for eligible first-time buyers.
However, this is often misunderstood as “free money.” In reality, Dream For All is typically structured as a 0% interest shared appreciation (equity-sharing) loan. Understanding this difference is critical before you apply.
What Is Dream For All?
Dream For All helps qualified buyers cover part of their down payment when purchasing a home in California. Instead of paying interest or making monthly payments on this assistance, repayment generally happens later — when you sell the home or refinance.
- Support amount: Often up to a percentage of the home price (program terms apply)
- Interest rate: 0%
- Monthly payment: Usually none on the assistance portion
- Repayment timing: Upon sale or refinance
Who Typically Qualifies?
While official rules may update annually, the program commonly looks at the following:
- First-time homebuyer status (often defined as no ownership in the past 7 years)
- California residency for at least one applicant
- Household income at or below 120% of Area Median Income (AMI) by county
- Sufficient credit profile per participating lender standards
- Pre-Approval from a lender familiar with the program
- Homebuyer Education Course completion certificate
The Step-by-Step Process (What Successful Applicants Do)
- Speak with a lender or broker who understands Dream For All processing
- Obtain a Pre-Approval Letter
- Complete the required Homebuyer Education
- Prepare income and asset documentation (tax returns, W-2, pay stubs, bank statements)
- Apply promptly when the application window opens
Understanding the AMI 120% Income Rule
One of the most misunderstood parts is the household income limit. Eligibility is usually based on combined household income relative to your county’s AMI.
| County | Example AMI | 120% Limit | Max Household Income (Example) |
|---|---|---|---|
| Los Angeles County | $100,000 | ×1.2 | $120,000 |
| Orange County | $120,000 | ×1.2 | $144,000 |
| San Diego County | $110,000 | ×1.2 | $132,000 |
Note: These are illustrative examples. Always verify current AMI limits at the time of application.
How Repayment Actually Works (Shared Appreciation)
Instead of repaying monthly, you repay when you exit the property through a sale or refinance. At that point, you typically repay:
- The original assistance amount (principal)
- A defined share of the home’s appreciation (per program rules)
Example Scenario
- Home purchase price: $700,000
- Assistance received: $140,000
- Later sale price: $900,000
- Home appreciated by: $200,000
- Repayment: Principal + a portion of appreciation
The “Time Window” After You’re Selected
If selected, there is often a limited period to find a property, submit an offer, and close escrow. This is why experienced applicants identify target neighborhoods and properties before applying.
Common Mistakes to Avoid
- Waiting too long to get pre-approved
- Misunderstanding household income calculations
- Delaying the education course
- Not being ready to move quickly after approval
- Working with a lender unfamiliar with program mechanics
- Ignoring how repayment works when planning long-term
Frequently Asked Questions (FAQ)
1. Is Dream For All a grant or a loan?
It is generally structured as a shared appreciation, 0% interest loan rather than a pure grant.
2. Do I make monthly payments on this assistance?
Typically no. Repayment usually occurs when you sell or refinance the home.
3. What does “120% of AMI” mean?
Your total household income must not exceed 120% of your county’s Area Median Income.
4. Can I apply without pre-approval?
In practice, pre-approval is essential and often required before applying.
5. What happens if my home increases in value?
You may be required to share a portion of the appreciation when repaying the assistance.
6. Why do applications fill up so quickly?
Because this program helps remove the biggest obstacle for first-time buyers: the down payment.
Final Thoughts
Dream For All can be a powerful pathway into homeownership if down payment is your primary challenge. Preparation is everything: understand the income limits, secure pre-approval early, complete education, and know how shared appreciation works before you commit.
