New Fund: California Dream for All

CSG assists in the creation of a new homeownership fund intended to assist 7,700 borrowers each year over the next 10 years.

In collaboration with California Forward, HR&A Advisors, and California Community Builders, CSG worked with the California Treasurer’s Office and Legislature to design the California Dream for All revolving investment fund, recently approved by the State. This fund is designed to make homeownership accessible for first time and first-generation buyers, especially those who have been historically discriminated against.

Beyond racial equity disparities, homeownership is increasingly unattainable for the vast majority of low- and moderate-income Californians. Already high home prices soared 40% during the pandemic, and higher mortgage rates have increased monthly payments another 45%.

To address this challenge, California Dream for All will provide an ongoing revolving investment fund, intended to be approximately $1 billion per year, to provide large, shared appreciation second mortgages with no monthly payments. The fund would provide approximately 17% of the purchase price of the home, together with the borrower’s own down payment, and a standard 80% loan-to-value Fannie Mae / Freddie Mac fixed rate mortgage.

The design would provide even larger amounts for borrowers whose student loan payments make it still harder to buy a home.

This revolving investment fund will be especially transformative for insulating low to moderate income families from escalating rents and building household wealth – while being able to help subsequent generations of homebuyers even if prices continue to rise dramatically.

Even if California home prices continue to go up as they have in the past, the aim is to ultimately help 150,000 families of up to 150% AMI generate household wealth equal to 19 times the state’s net investment over the next 40 years.

While innovative in scale, California Dream for All builds on successful, continuing programs that CSG Advisors designed for San Francisco starting in the 1980s and Alameda County in 2016.

This critical effort embodies an integral part of CSG Advisors’ core mission: helping public agencies leverage financing to build stronger communities. This effort can provide a national model for helping families in high-cost areas build financial security in the most fundamental way possible: by having a permanent place to call home.

Read the Full California Dream for All Report.