America is suffering from inflation, and real estate is not exempt from the onslaught. House prices have increased sporadically, making it harder for the average American to become a property owner. 

This is especially true for people in California, one of the most expensive areas to live in the US. To combat this, Californian legislation introduced what it thought was a solution, but what may end up being a handicap to the people it is trying to help.

They call the initiative Dream for All, and it helps home buyers afford houses, but there’s a caveat: when they’re ready to move on to a new home, they will have to return a share of the profits they make from the sale.

California is a beautiful place, but many residents are increasingly having difficulty buying houses because of the high cost. This is despite the fact that real estate there is at an all-time low. Many factors contribute to this, including barely enough affordable housing, high interest and property tax rates, and the high cost of living.

The Dream for All program was developed to support residents looking to own property in  California by acting as a supplementary loan during a purchase. House buyers get 20% of the actual price, up to $150,000, and in return, they must return the loan as well as a percentage of the home’s appreciation value. 

The Dream for All program had existed since 2022, when Senator Toni G. Atkins introduced it to California’s people. Of course, to get the 20%, you’ll need to qualify for the program. 

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If you believe the program can help, you can apply but must qualify. Certain conditions must be met to get aid from the program. An important one is your ability to keep up with the mortgage payment. Essentially, the Dream for All program gets your foot in the door, but as a buyer, you will still need to have the capital to make a down payment and the closing costs. 

The Dream for All initiative may sound too good to be accurate, but it is not. It has a huge clause attached to it, which makes it mandatory for homeowners to pay back the 20% loan they initially got whenever they decide to sell the house they bought. Depending on their earnings, they will also pay back a percentage of the appreciation value. Those who earn low incomes must pay an extra 15%, while high-income earners will pay back 20%. 

The credit ratings of those willing to opt for the Dream for All initiative will also be considered to ensure they fit suitably. To qualify, a homebuyer’s credit rating needs to be higher than 660, and income cannot be more than 120% of the average earnings of other people who reside in those same areas. 

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When the program was first introduced, $300 million was allocated to the endeavor, but it quickly ran out as many Californians rushed to take advantage of what they considered a blessing. The funds were exhausted in just under two weeks. 

It is true that the initiative gets Californians much-needed assistance to buy a house; however, they may suffer when it is time to sell the house. They will have to pay back more than they were loaned, and since they will need the profit from the sale to buy their next home, many may be left stranded, leaving them with no way forward and very little funds.

The next round of the program will focus on people whose incomes are so low that without the Dream for All initiative, they would never have gotten to own property. The next round will also target people who have never owned homes before.

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In the face of the loans they will need to pay back, many homeowners may delay selling their homes for as long as possible. This will help them avoid the extra loans they will incur by selling. Since there are barely enough affordable houses to go around, more people will be left without a home as others trying to avoid the extra loans struggle to hold on to theirs. 

Dream for All was created to assist Californians in getting their own houses. However, when you consider that those who opt-in will have to pay more than they were given, it looks more like a trap. While people try to delay selling, many more will be left without the opportunity to own one, which will bring the state back to where it began. 

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