{"id":63488,"date":"2024-03-19T10:26:39","date_gmt":"2024-03-19T17:26:39","guid":{"rendered":"https:\/\/lapost.us\/?p=63488"},"modified":"2024-03-19T10:26:39","modified_gmt":"2024-03-19T17:26:39","slug":"generational-wealth-now-in-reach-for-first-time-california-homebuyers","status":"publish","type":"post","link":"https:\/\/lapost.us\/?p=63488","title":{"rendered":"Generational Wealth Now in Reach for First-Time California Homebuyers"},"content":{"rendered":"
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By<\/span>Selen Ozturk<\/a><\/div>\n<\/div>\n<\/div>\n
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Homeownership, often the first step for generational wealth, is ever-more unaffordable for California families \u2014 especially those of color.<\/p>\n<\/div>\n<\/div>\n

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\"Homebuying\"<\/div>\n<\/div>\n
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Homeownership, often the first step for generational wealth, is ever-more unaffordable for California families \u2014 especially those of color.<\/p>\n

Now, the California Housing Finance Agency (CalHFA) is changing that for first-generation homebuyers with its\u00a0Dream For All<\/a>\u00a0Shared Appreciation Loan Program.<\/p>\n

Dream For All<\/h2>\n

The program, now in its second round thanks to $250 million from the state legislature, helped 2,000 homebuyers in its first round in April 2023. Dream For All is aimed to help another 2,000 now through a mortgage-lowering loan of up to $150,000 or 20% of a house purchase price, whichever is less.<\/p>\n

\u201cWith this program, we\u2019re trying to jumpstart the generational wealth that owning a home can get you,\u201d said CalHFA Information Officer Eric Johnson. \u201cIf it\u2019s a 20% loan, for example, you do have to pay that 20% when you sell or refinance the home, plus 20% of what you\u2019ve gained in the sale, so we can use that money to fund the next generation of new homebuyers.<\/p>\n

To be considered a first-generation homebuyer, applicants must not have owned their first home in the last seven years, and their parents must not currently own a home \u2014 or, if they died, must not have owned one at their passing. Those who were in the foster care system at any time also qualify.<\/p>\n

To qualify for the loan, at least one person on it must be a California resident and at least one person must be a first-generation homebuyer, but these need not be the same person.<\/p>\n

Income limits<\/a>\u00a0also apply per county, though they are as high as $287,000 for buyers in Santa Clara County and $280,000 for San Francisco and Marin.<\/p>\n

\u201cIt does feel a little bit strange that a low-to-moderate-income homebuyer can make that much, but that\u2019s where California is these days,\u201d said Johnson.<\/p>\n

Unlike the \u201cfirst come, first served\u201d first round of loans in 2023, this application period will be a lottery randomly drawn from applications filed between April 3 and April 29, so that funds are distributed more fairly. Although no announcement date for drawn names is set after they\u2019re audited, it will likely be the first or second week of May.<\/p>\n

To enter the lottery, first-time homebuyers will need a credit approval letter from one of CalHFA\u2019s\u00a0approved lenders<\/a>. Those who win the loan have 90 days to find and buy a home.<\/p>\n

There are so many Californians who have a good income, who have good jobs and credit, but haven\u2019t been able to save up for a downpayment, not having the advantage of intergenerational wealth,\u201d said Johnson.<\/p>\n

Generational and racial wealth gaps<\/h2>\n

A disproportionate amount of these homebuyers are from communities of color, said Maeve Elise Brown, Executive Director and Founder of Housing and Economic Rights Advocates (HERA).<\/p>\n

In\u00a02023<\/a>, the homeownership rate for Black U.S. households was at 45.9% \u2014 28.6 percentage points below the white rate of 74.4%. For Latino households, the gap was a similar 25.8% below the white rate.<\/p>\n

A\u00a02022<\/a>\u00a0poll with similar results found that 38% of white adults said they\u2019d received at least $10,000 in gifts or loans from a relative for large expenses like a down payment, while only 14% of Black, 16% of Latino and 19% of Native American adults had.<\/p>\n

\u201cThough homeownership has been a generational economic driver, property values are outpacing our ability to pay them\u201d \u2014 the average California home price is over $765,000 as of March 2024 \u2014 \u201cand the debt people of color carry, especially student debt, creates a downpayment and safe loan credit barrier,\u201d said Brown.<\/p>\n

Black bachelor\u2019s degree holders, for instance, have an average of\u00a0$52,000<\/a>\u00a0in student debt, and four years after graduation they hold nearly twice as much debt as their white peers. 46% of Black student borrowers are likely to put off buying a home due to this debt.<\/p>\n

As this wealth gap expands, the racial homeownership gap is stagnating, said Ria Cotton, a broker and owner of Cotton Realty.<\/p>\n

As of 2022, 72% of white Americans, 63% of Asian Americans, 51% of Hispanic Americans and 44% of Black Americans owned a home.<\/p>\n

While the overall American homeownership rate rose from 64.7% a decade prior to 65.5% in 2022, the Black-white homeownership gap rose from 26% to 29%, according to the\u00a0National Association of Realtors<\/a>.<\/p>\n

\u201cThe Dream For All loan lets people historically disadvantaged from buying a home leverage that generational wealth, but we can\u2019t stop there,\u201d explained Cotton. \u201cWe have to start with helping communities build credit, minimize debt-to-income and save for a downpayment, and talk about what happens after you buy \u2014 from foreclosure prevention, to developing more property, to using your credit for equity, like buying a car for lower interest rates.\u201d<\/p>\n

\u201cOur message with this loan program is: \u2018There\u2019s hope. It\u2019s still possible to buy a house in California,\u2019\u201d added Johnson.<\/p>\n

\u201cWe have a wealth gap in this country that\u2019s driving unequal homeownership, and this loan shows us how much your generational legacy matters in powering through it,\u201d said Cotton.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

BySelen Ozturk Mar 15, 2024 Homeownership,...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-63488","post","type-post","status-publish","format-standard","hentry","category-ca-local"],"_links":{"self":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/63488","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=63488"}],"version-history":[{"count":1,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/63488\/revisions"}],"predecessor-version":[{"id":63489,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/63488\/revisions\/63489"}],"wp:attachment":[{"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=63488"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=63488"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=63488"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}