Down payment assistance in California: what is real and what is a marketing line

Somebody sends me a screenshot of an ad about once a month. Free money for California homebuyers. No repayment. Apply now.

There is real assistance available in this state, and some of it is substantial. There is also a lot of advertising built on the fact that most buyers never ask the one question that decides whether a program helps them or quietly costs them later.

That question is how it's structured.

Key takeaways

• Assistance comes in four structures: a grant or forgivable loan, a deferred-payment second, a shared appreciation loan, and an ordinary repayable second. The amount matters far less than which one you are taking.
• CalHFA's MyHome is a deferred-payment junior loan of up to the lesser of 3.5% of purchase price or appraised value on government first loans, and 3% on conventional.
• CalHFA's Dream For All is a shared appreciation loan. The borrower repays a share of the home's appreciation, not interest, and it is allocated by a limited application window rather than first come, first served.
• The 2026 Dream For All application window closed on 16 March 2026 and vouchers from that round were released in May 2026. Programs with windows are not available on demand.
• Most assistance is secured by a second deed of trust, which means it has to be dealt with at refinance as well as at sale.
• Nearly every program requires homebuyer education and owner occupancy. Those are not formalities.

Four structures, and why the structure is the whole story

Strip the branding off and almost everything in California falls into one of four shapes.

A grant or forgivable loan. You receive funds and, if you meet the conditions, you never pay them back. The conditions usually include staying in the home for a set period. Leave early and forgiveness can be partial or gone.

A deferred-payment second. A real loan recorded against the property with no monthly payment. It sits quietly until you sell, refinance or pay off the first. Then it is due.

A shared appreciation loan. You repay the original amount plus a share of whatever the home gained in value. In a flat market this is cheap. In a market that runs, it is the most expensive money in the stack, and it is impossible to price in advance.

An ordinary repayable second. A second mortgage with a payment. Honest, boring, and the easiest to understand.

An ad that says assistance up to a large number and nothing else has told you almost nothing. The number is the headline; the structure is the deal.

CalHFA MyHome

MyHome is the workhorse, and it is a deferred-payment junior loan rather than a grant.

CalHFA's terms: on government first loans it is an amount up to the lesser of 3.5% of the purchase price or appraised value, and on conventional first loans up to the lesser of 3%, applied toward down payment or closing costs or both.

The eligibility requirements are the ones to read closely. CalHFA requires that you be a first-time homebuyer by their definition, that you occupy the property as a primary residence with no non-occupant co-borrowers allowed, that you complete homebuyer education counseling and obtain a certificate from an eligible counseling organization, and that you meet CalHFA's income limits for the program.

Non-occupant co-borrowers not allowed is the one that ends the conversation most often. A buyer planning to put a parent on the loan who will not live there is not eligible, and finding that out after shopping for a month is a bad afternoon.

Because it is deferred rather than forgiven, MyHome is still owed. It is a good program and it has helped a lot of people into houses. It just is not free, and the buyers who are happiest with it are the ones who understood that going in.

Dream For All, and what shared appreciation actually means

Dream For All is the program everybody has heard of, and it is the one most often described inaccurately.

CalHFA's terms: up to 20% of the sales price or appraised value, capped at $150,000. At least one borrower must meet CalHFA's definition of a first-generation homebuyer. Repayment is triggered at the earliest of transfer of title, sale, payoff of the first loan, payoff of the subordinate loan balance, or refinance of the first.

The repayment is where it differs from everything else. Rather than interest, you repay the original amount plus a share of the home's appreciation: 20% of appreciation for borrowers above 80% of area median income, and a reduced 15% share for borrowers at or below 80% AMI. CalHFA caps total repayment at 2.5 times the original loan amount.

Work through what that means. If the house appreciates meaningfully over the years you own it, the share you hand back is a real number, and you cannot know it when you sign. The program exists to get people into houses who otherwise could not buy one, which is worth something. Understand the trade before you take it.

The other thing to know is availability. Dream For All does not run continuously. CalHFA opens an application window, applicants register, and vouchers are allocated from that pool. The 2026 window closed on 16 March 2026, and CalHFA released that round's vouchers in May 2026, with applicants seeing one of three outcomes: not selected, waitlisted, or voucher issued.

So an ad running today offering you Dream For All money is, at best, offering to help you apply the next time a window opens. Anyone presenting it as currently available is not being careful with you.

GSFA Platinum, and the repeat-buyer gap

Most assistance is aimed at first-time buyers, which leaves out a large group: people who owned a home once, no longer do, and are trying to get back in.

GSFA Platinum is the program that most often fits. It is administered through participating lenders rather than directly, the assistance is structured as a forgivable loan, and GSFA states that most of its programs carry no first-time homebuyer requirement. GSFA also notes that perfect credit is not required and that the assistance works with a variety of first mortgage types.

GSFA publishes complete program policies, eligibility requirements and rates through its participating lenders rather than on its own site, so the terms you are quoted come from the lender. Get them in writing.

What assistance costs you later

Here is the part that almost never appears in the advertising.

Most assistance is secured by a second deed of trust. That recorded lien does not care that you think of it as help. When you refinance the first loan, the second has to be either paid off or formally subordinated, and subordination is a request, not a right. Program rules vary on whether they will grant it and under what conditions.

Selling is cleaner, because the second gets paid from proceeds. But it reduces what you walk away with, and on a shared appreciation loan the amount depends on how much the house gained rather than a fixed balance you can look up.

Occupancy conditions have teeth too. A program requiring the home to be your primary residence does not stop applying because you got a job in another state. Read what happens if you have to move, before you need to know.

None of this makes assistance a bad deal. For a buyer whose only obstacle is the cash to close, it is often the difference between owning and renting for another five years. It makes it a deal with terms, like every other deal.

The questions that separate real from noise

Six questions. Ask them of any program anyone puts in front of you, and ask for the answers in writing.

• Is this a grant, a forgivable loan, a deferred second, a shared appreciation loan, or a repayable second? If the answer is vague, that is the answer.
• What triggers repayment? Sale only, or refinance too?
• If it is forgivable, forgiven over what period, and what happens if I leave early?
• If it is shared appreciation, what share, and is it capped?
• Will the program subordinate if I refinance, and under what conditions?
• Is the program open right now, or is this a window I would be waiting for?

A lender who answers all six without hedging is worth working with. One who steers you back to the headline number is selling you the ad.

Common questions

Can I use down payment assistance with an FHA loan?

Generally yes, and CalHFA's MyHome is structured for exactly that pairing, with a higher percentage on government first loans than on conventional. The combination of a low minimum from the first loan program and a deferred second covering the cash is the most common way these are put together in California.

Does assistance mean I will not need any money at closing?

Rarely. Most programs cover down payment, closing costs, or some of each, up to a cap. Prepaid items, inspections and the deposit still have to come from somewhere, and the gap between what the program covers and what closing actually costs is where buyers get caught. Have your lender run the full cash-to-close figure with the assistance applied before you write an offer.

Will taking assistance make my offer weaker?

It can, in a competitive situation, because a listing agent sees another layer that has to clear. The way to answer it is preparation rather than concealment: a fully underwritten approval, a lender who can be reached, and a clear statement of what the program requires and how long it takes. A well-documented assisted offer beats a thin conventional one.

What is a first-generation homebuyer?

CalHFA's definition for Dream For All covers borrowers who have not held title to a home in the prior seven years and whose parents do not presently own a home, and it also reaches people with a history of foster or institutional care. The exact definition is the program's and it is more specific than the plain-English phrase suggests, so confirm it against CalHFA's current handbook rather than assuming.

Before you chase a program

The useful order is backwards from how most people do it. Find out what you qualify for on the first loan, then see which assistance programs fit that, then look at timing. Doing it the other way around is how buyers end up waiting on a window that will not open in time. Start on the [financing side](/financing) and we will work it in that order.

If you are early and just want to know whether any of this applies to you, that is a short conversation rather than an application. The [buyer resources](/buyers) cover what comes before and after.