Down Payment Assistance in California: What Is Real and What Is a Marketing Line

Is down payment assistance real?

Yes. It is also heavily advertised by people who are vague about how it works, which makes careful buyers assume the whole category is a scam.

It is not a scam. It is a set of second loans with specific terms, and the terms are the entire story. A program is good or bad for you depending on how long you plan to own, what your income is, and what the money costs when you eventually sell or refinance.

Here is how the main California programs are actually built.

MyHome: a deferred second loan

The California Housing Finance Agency's MyHome Assistance Program is "a deferred-payment junior loan to assist with down payment and/or closing costs."

The amount depends on the first loan: up to 3.5 percent of purchase price or appraised value on a government (FHA) first, up to 3 percent on a conventional first.

Deferred means you do not make monthly payments on it. It does not mean it is a gift. It is a recorded second lien and it comes due when you sell, refinance or pay off the first.

Requirements, per CalHFA:

• First-time homebuyer
• Owner occupancy — it must be your primary residence
• Homebuyer education with a certificate, completed by at least one occupant borrower
• Within CalHFA income limits for the program
• Single-family one-unit, including approved condos and PUDs; guest houses and manufactured housing are allowed

CalHFA is not a direct lender. You go through an approved loan officer.

Dream For All: shared appreciation, which is a different animal

The California Dream For All program is a shared appreciation loan, and the distinction matters more than anything else on this page.

The assistance is large: up to 20 percent for down payment or closing costs, capped at $150,000, for first-generation homebuyers.

The repayment is where it differs. A deferred loan like MyHome comes due at the amount borrowed. A shared appreciation loan comes due at the amount borrowed plus a share of the appreciation. CalHFA sets that share by income: a moderate-income borrower repays the original amount plus 20 percent of the home's appreciation, while a borrower at or below 80 percent of area median income repays the original amount plus 15 percent.

Put a number on it. Borrow $120,000 on a $600,000 purchase, sell seven years later at $800,000, and at the 20 percent share you repay the $120,000 plus $40,000 of the $200,000 in appreciation. That is not a trick — it is the stated design, and it is how the program recycles capital to the next buyer. But it is a fundamentally different trade than a deferred second, and you should see that arithmetic before you sign, not after.

One thing to know before you plan around it: the application period for the current round closed on March 16, 2026. If you applied, check your status in CalHFA's voucher portal — vouchers were issued by selection, with a waitlist. If you were not selected, CalHFA points applicants to MyHome and CalPLUS with ZIP instead.

Demand for Dream For All has outstripped funding in every round, and the structure and application process have changed between them. Verify the current terms at the source rather than relying on any article, including this one.

Local and employer programs

City and county programs exist across the Inland Empire and come and go with funding cycles. So do employer-assisted housing benefits, and lender-specific grant programs that are not government money at all.

These are worth asking about, but they are also where most of the misleading advertising lives. Which brings us to the part that actually protects you.

Four questions that separate real from noise

Ask these about any assistance program, in these words:

1. Is this a grant, a deferred loan, a forgivable loan, or a shared appreciation loan? Four different things. If the answer is a sentence instead of one of those four words, keep asking.
2. If it is forgivable, over how many years, and what happens if I sell in year three? Forgiveness schedules are real, and so are recapture provisions.
3. If it is shared appreciation, what percentage of appreciation, and can you show me the payoff on a sale in five years at three percent annual growth? A loan officer who cannot produce that number has not read the program.
4. What does this do to my interest rate on the first loan? Some assistance is paired with an above-market first. Sometimes that trade is worth it. You cannot know without seeing both quotes side by side.

The honest tradeoff

Assistance gets you in the door sooner. That is genuinely valuable in a market where saving a down payment is a moving target.

What it costs you is equity and flexibility. A second lien limits your ability to refinance cleanly, it has to be dealt with when you sell, and in a shared appreciation structure it takes a piece of the upside that is the main reason to own in the first place.

For a buyer planning to stay ten years, that trade is usually fine. For a buyer who thinks they may move in three, run the numbers hard before you sign, because a short hold is where these programs get expensive.

What to do next

Get two quotes: your purchase with assistance, and your purchase without it, from the same loan officer on the same day. Compare the monthly payment, the cash to close, and the estimated payoff at five years.

If the assistance version still looks better with all three numbers in front of you, take it. That is a decision made on arithmetic instead of on a headline.