California homebuyers making up to $211,000 annually will be able to receive a 20% down payment, and all closing costs, at a 0% interest rate.
While the state has long-offered homebuyer assistance through the state's Housing Finance Agency (Cal HFA), a new program, the California Dream For All Shared Appreciation Loan program will give the state a proportionate interest in the property they're helping with, according to KPBS.
"It’s available to low- and moderate-income. So the upper income limit is $211,000," said Ellen Martin, president of the Cal HFA.
According to Scott Evans, EVP of Cross Country Mortgage, "The state of California can give up to 20% for a down payment and closing costs. It’s a 0% interest rate. The payments are deferred for the entire life of the loan," adding "When you sell the property or refinance the loan, they take up to 20% of the appreciation. The homeowner gets to keep 80%."
According to Evans, another consideration are tax breaks which become available to homeowners, which can be 'significant enough to help offset the cost of mortgage payments' (and which of course assumes the homeowner makes enough to pay taxes in the first place).
In theory, when someone sells a home financed with the HFA's assistance, any profits made by the state will go back into the program, which will in turn fund new 0% loans.
That said, it's not an unlimited offer - as there is only $300 million available right now. With thousands of Californians anticipated to apply, it may not last long.