California program could lend first-time home buyers 17% for down payment – NBC 7 San Diego

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Just as the median price of a single-detached home has now hit $1 million in San Diego County, California lawmakers are considering a bill that would help first-time home buyers boost their buying power.

The California Dream for All (CDA) program is the next step for lawmakers addressing the lack of affordable housing in the state.

The CDA program, proposed by State Senator Pro Tempore Chair Toni Atkins, creates a $1 billion fund to help first-time home buyers loan 17% of a home’s purchase price for a down payment . If they refinance or sell their home later, the state gets their 17% back.

California’s low inventory and inflation are driving up home prices in an already expensive state. Hopeful first-time home buyers like David Kao and his fiancé are experiencing this.

“Even writing a nice letter to the seller. You know, introduce ourselves, introduce our pup, tell them we’re trying to find some land for him to run around on. And obviously it won’t have as much leverage as a cash offer,” Kao said.

Both Kao and his fiancee have stable jobs as pharmacists and they are looking to move out of their one-bedroom apartment.

In fact, Kao said he recently bid on an asking price of $924,900 for a home in Poway, but was outbid. He said the house went to someone who offered a 50% down payment and waived contingencies.

“It’s hard because while we want to try and compete with these people by trying to increase our buying power or just being less picky with the first house we’re trying to get into, when things get bumpy , you know, someone with a lot more money or more buying power is going to win,” Kao said.

Kao’s realtor, John Freeman of Pete Knows Real Estate, said the state program provides a loan, not a grant, and will certainly help with California’s affordability crisis.

“There has to be a way to get these people into homes, because if they don’t get into homes now, who knows, in the next 20 years, if they will be able to afford homes in the future” , Freeman said.

But low inventory is still a problem. Several bills from the Legislature deal with the shortage of units.

“At this time, there are only 66 three-bedroom, two-bathroom, 1,000 square foot properties that are available for purchase,” Freeman said.

Kao will continue to search for a new home.

“I mean, I’m not an economist. I think that’s very extreme. I feel like it could be very helpful, but at the same time, I don’t know if it really solves the problem of rising house prices,” Kao said.

But at the very least, he told NBC 7 that the state’s proposed next step gave him some hope that help might be on the way to becoming a landlord in San Diego.

You can find more details about the program here.

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