Down Payment Assistance in California 2026 | CalHFA & More | Billcutter

The California Homeownership Challenge — and the Solution

California is one of the most desirable places to live in the world — and one of the most expensive. With median home prices exceeding $800,000 statewide and well above $1 million in coastal markets, saving for a down payment can feel like an impossible task for many California families.

The good news: California has one of the most robust down payment assistance (DPA) ecosystems in the nation. Programs from the California Housing Finance Agency (CalHFA), local housing authorities, and federal sources exist specifically to help low-to-moderate income buyers bridge the gap between their savings and the down payment they need to purchase a home.

Billcutter specializes in helping California homebuyers navigate and access these programs. Many buyers don't realize they qualify — and some programs can cover your entire down payment. This guide breaks down what's available in 2026.

Overview of the California DPA Landscape

California's down payment assistance ecosystem includes:

- State programs administered by CalHFA (California Housing Finance Agency)
- County and city programs offered by local housing authorities
- Federal programs through HUD-approved agencies
- Employer-assisted housing (less common, but available in some industries)
- Charitable programs administered by nonprofits (Chenoa Fund, National Homebuyers Fund, etc.)

The most impactful and widely-used programs are CalHFA's offerings, which we cover in depth below. Most programs are targeted at first-time homebuyers, though some have expanded definitions.

CalHFA Programs: California's Premier Down Payment Assistance

The California Housing Finance Agency (CalHFA) is the state's primary housing finance authority. CalHFA does not lend money directly to borrowers — instead, it works through a network of approved lenders (like Billcutter) who originate CalHFA loans and assist programs on CalHFA's behalf.

MyHome Assistance Program

MyHome is CalHFA's flagship down payment and closing cost assistance program. Here's how it works:

- Assistance amount: Up to 3.5% of the purchase price or appraised value (whichever is lower)
- Form: Deferred-payment second mortgage (silent second)
- Interest: Same rate as the first mortgage
- Repayment: Due when you sell, refinance, pay off the first loan, or transfer title
- Paired with: CalHFA FHA first mortgage or CalHFA Conventional first mortgage
- Use: Down payment, closing costs, or both

Example: If you're buying a $600,000 home with a CalHFA FHA loan:
- MyHome provides $21,000 (3.5% of $600,000)
- That covers your entire FHA down payment (3.5%)
- You pay $0 out of pocket for the down payment (closing costs may still apply)

Income limits apply and vary by county. For most California counties, limits range from approximately $180,000 to $265,000 in annual household income depending on family size and location.

CalHFA Conventional First Mortgage

The CalHFA Conventional program is a first mortgage product designed to work in conjunction with DPA assistance:

- Loan type: Conventional (Fannie Mae / Freddie Mac)
- Down payment: As low as 3%
- PMI: Required if less than 20% down (but can be removed at 80% LTV)
- Income limits: Area Median Income (AMI) based — typically 80% to 120% AMI
- Paired with: MyHome or other CalHFA assistance programs
- Best for: Borrowers with good credit who want a conventional loan with DPA help

CalHFA FHA First Mortgage

The CalHFA FHA program pairs a government-backed FHA first mortgage with CalHFA's assistance programs:

- Loan type: FHA (insured by the Federal Housing Administration)
- Down payment: 3.5% (can be 100% covered by MyHome)
- MIP: FHA mortgage insurance premium required
- Income limits: Based on county AMI limits
- Credit score minimum: 660 (CalHFA's overlay above FHA's 580 minimum)
- Best for: Borrowers with lower credit scores or smaller savings

Dream For All Shared Appreciation Loan

Dream For All is CalHFA's most powerful and innovative DPA program — but also the one with the most nuance. Understanding how it works is critical before you apply.

What Is Dream For All?

Dream For All is a shared appreciation loan that provides up to 20% of the purchase price as a second mortgage for down payment assistance. This is substantially more than other programs and can dramatically reduce your monthly payment by eliminating PMI and lowering your first mortgage balance.

Example:
- Purchase price: $700,000
- Dream For All provides: $140,000 (20%)
- Your first mortgage: $560,000 (no PMI since LTV is 80%)
- Your out-of-pocket down payment: $0 (assuming no closing costs)

How the Shared Appreciation Component Works

Here's the trade-off that makes Dream For All unique: you repay the loan plus a share of the appreciation.

- CalHFA provides 20% of the purchase price
- When you sell, refinance, or transfer the home, you repay: the original loan amount + 20% of the home's appreciation

Example of repayment:
- You bought at $700,000; CalHFA gave $140,000 (20%)
- 5 years later, you sell for $900,000 (appreciation of $200,000)
- You repay: $140,000 + 20% of $200,000 = $140,000 + $40,000 = $180,000 total to CalHFA

This shared appreciation model allows CalHFA to offer a much larger upfront assistance amount without charging interest — instead, they participate in your home's future growth. In a flat or declining market, you'd only repay the original amount. In a rising market (historically the norm in California), CalHFA shares in the gains.

Who Dream For All is best for:
- Buyers who need a large down payment to avoid PMI and lower their payment
- Buyers who plan to build equity and understand the shared appreciation model
- Buyers who may not qualify for traditional 20% down but want the benefits of 80% LTV financing

Dream For All Availability

Dream For All has been extremely popular — and funding is limited. When CalHFA releases funding, it tends to be claimed very quickly. Billcutter monitors program availability and can alert you when new funding opens. Contact us to get on our notification list.

Income and Purchase Price Limits

All CalHFA programs have eligibility limits. While limits change and vary by county, here are general 2026 guidelines:

Income Limits (approximate)
Income limits are based on Area Median Income (AMI) and family size:

In high-cost counties, AMI is higher — meaning income limits are correspondingly higher. In Los Angeles County, for example, 120% AMI for a family of 4 is approximately $158,000+.

Purchase Price Limits (approximate)

Purchase price limits also vary by county. In high-cost counties like LA, SF, and OC, limits are generally:

- Non-targeted areas: $850,000–$900,000
- Targeted areas (census tracts with lower income or higher minority populations): Higher limits apply

Contact Billcutter for current, county-specific income and purchase price limits.

How DPA Programs Work: The Three Main Structures

1. Silent Second Mortgage (Deferred Payment)

The most common structure. You receive assistance as a second mortgage that:
- Has no monthly payments
- Accrues interest (often simple interest) or is interest-free
- Becomes due upon sale, refinance, or payoff of the first loan

This is how MyHome works.

2. Forgivable Loan

You receive assistance as a second mortgage that is gradually forgiven over a period of years (often 3–5 years). If you stay in the home for the forgiveness period, you owe nothing back. If you sell or refinance early, a portion must be repaid.

Common with local city and county programs.

3. Shared Appreciation Loan

You receive a larger assistance amount, but repay the original loan plus a percentage of the home's appreciation. This is how Dream For All works — larger upfront help in exchange for a share of future gains.

Combining DPA with FHA or Conventional First Mortgages

Most DPA programs are designed to work alongside either an FHA or conventional first mortgage:

Combining programs can create a powerful financing stack. For example: CalHFA Conventional + MyHome could give you 3% in DPA against a 3% required down payment — meaning you pay nothing out of pocket for the down payment itself.

Eligibility Requirements

First-Time Homebuyer Definition

CalHFA defines a first-time homebuyer as someone who has not owned and occupied their primary residence in the past three years. This means:

- You may have owned a home previously as long as you haven't lived in it as your primary residence in the last 3 years
- Divorced individuals who didn't retain ownership of the marital home may qualify
- People who have only owned rental or investment properties (not their primary home) may qualify

This is a more inclusive definition than many buyers realize.

Credit Score Requirements

Other Requirements

- Complete a HUD-approved homebuyer education course (typically 8 hours, available online)
- Occupy the home as your primary residence
- Property must be a 1-unit, owner-occupied home (single family, condo, or PUD)
- Loan must be for a purchase (not a refinance)

Step-by-Step: How to Apply for DPA in California

1. Check your eligibility: Review income limits, purchase price limits, and credit requirements for your target county. Billcutter can do this analysis for you.

2. Get pre-approved: Work with a CalHFA-approved lender (like Billcutter) to get pre-approved for both the first mortgage and the DPA assistance. This requires income documents, credit pull, and an assessment of your assets.

3. Complete homebuyer education: Most CalHFA programs require a HUD-approved homebuyer education course. You can complete this online at eHome America or Framework for approximately $99. Certificate required prior to closing.

4. Find a home: Work with a real estate agent to find a home within the purchase price limits for your program and county.

5. Go under contract: Once you're under contract, your lender submits your full loan application with CalHFA documentation.

6. CalHFA loan approval: CalHFA reviews and approves the assistance loan in parallel with the first mortgage underwriting.

7. Close: Both the first mortgage and the DPA second mortgage fund simultaneously at closing. Your down payment comes from the DPA funds.

Frequently Asked Questions: Down Payment Assistance in California

Q: Can I use down payment assistance to buy a home with nothing out of pocket?
A: In some cases, yes. Programs like MyHome can cover your entire FHA down payment (3.5%). However, you'll typically still need funds for closing costs unless those are also covered by seller concessions or lender credits.

Q: Do I have to be a first-time homebuyer to qualify for DPA in California?
A: Most CalHFA programs require first-time homebuyer status — defined as not having owned and occupied a primary residence in the past 3 years. Some local programs have broader eligibility.

Q: What is the income limit for CalHFA programs in 2026?
A: Income limits vary by county and family size, generally up to 80–120% of the Area Median Income. In high-cost counties like LA and SF, this can be $150,000–$200,000 or more. Contact Billcutter for current county-specific limits.

Q: How does Dream For All's shared appreciation work in a declining market?
A: If your home doesn't appreciate (or declines in value), you only repay the original assistance amount. The shared appreciation is calculated on actual appreciation — if there is none, CalHFA does not share in any losses.

Q: Can I refinance if I have a DPA second mortgage?
A: Often yes, but the DPA loan typically becomes due and payable upon refinance unless the program has specific provisions for refinancing. In some cases, refinancing while the assistance loan is outstanding triggers repayment. Consult with Billcutter before refinancing.

Q: How long does DPA assistance take to process?
A: CalHFA loans typically add 5–7 business days to the standard loan timeline. Plan for a 30–40 day escrow. CalHFA approvals are processed through approved lenders like Billcutter.

Q: Is Dream For All currently available?
A: Dream For All is funded in limited tranches. Funding can be exhausted quickly when released. Contact Billcutter to check current availability and get on our notification list for new funding releases.

Let Billcutter Help You Access California Down Payment Assistance

Navigating California's DPA landscape can be complex — income limits, program stacking, eligibility rules, and funding availability all require expertise. Billcutter's licensed mortgage professionals have in-depth knowledge of CalHFA programs and local assistance options throughout California.

We'll analyze your situation, identify the programs you qualify for, and structure your financing to minimize your out-of-pocket costs at closing.

📞 Call us: 888-855-1423
🌐 Apply online: CLICK HERE
📍 18952 MacArthur Blvd Ste 100-207, Irvine, CA 92612


Billcutter is a licensed California mortgage broker. NMLS #1825243. Not a commitment to lend. Program availability and terms subject to change. Income and purchase price limits current as of 2026 and subject to periodic CalHFA updates. All loans subject to credit approval. Equal Housing Opportunity.