What If You Could Qualify For 200k More? -- Real Talk
Well, hello, everybody and welcome to a nother episode of Real talk. My name is Stephen Meade, the managing broker here at domicile real estate where we are on a mission to help California's renters become homeowners. And this is real talk where basically I just rant on whatever I think is important that I think people should know about, and isn't necessarily being discussed.
And I'm going to open this with a simple question. I've actually I've got two questions for you. Question number one, if you were a person out there, who is currently renting and did not buy a house, if you could turn back the clock? Two years, if you could go backwards, two years, the housing prices two years ago, would you buy a house? If you could get a home for two years ago prices? That's question number one. Question number two, if you could qualify for an extra one to $200,000 on a purchase, if I could wave a magic wand and help you qualify for one to $200,000 Extra than you are currently qualified for?
Would that make a difference for you? And if you answered yes to either of those questions, I have some very good news for you. The state of California recently released a program they've been working on for a while, that really solves a lot of the problems I've had with homeownership programs in the past, typically, homeownership programs have had a couple of fatal flaws. The first flaw was that they only qualified for properties that were not necessarily the properties that people wanted to buy. The second problem that they had is that they were often something called affordable housing programs.
And they were had something called deed restriction. So basically, you could buy a property at a really good price that you could qualify for, but you would be restricted on what price you could sell it for. So that's not really homeownership, right. And then the third problem with a lot of these programs, is that in many cases, the income limits were so restrictive, that anyone who could afford to buy a house made too much money to actually qualify for any of the programs to help you buy a house, which doesn't really make any sense. And so this program basically solves all of those problems.
It's called the California dream dream of homeownership for all there's some variation that's put on, it's being run by the California Housing and Finance industry agency, about $300 million has been allocated to this program, and they will give you one 2% up to 20% of the purchase price. And the income limits on this are huge, right? Normally, these programs are limited to something called 120% of area median income, that tended to make them right around 100 to $115,000. This program, if you are in Los Angeles counties, as long as your household income is under $180,000, you can qualify for this program. In Orange County, if your income is under $235,000, you can qualify for this part, this program is actually eligible for everybody.
And here's how it works. This is something called a shared appreciation loan. And the way I look at it is this is kind of like the rich uncle or aunt that you didn't know you have, right? The state is willing to invest with you in a property up to 20%. And then when you go to sell that property, they're going to ask for that percentage back. So here's a perfect example, right? If you are buying a home for a million dollars, which is possible to do, that would mean that you could receive a this shared appreciation loan of up to $200,000 and combine that with an $800,000 mortgage. Right, so that adds up to $1,000,000.08 100 plus 200.
And you wouldn't have to make any payments on this $200,000. You wouldn't have to pay mortgage insurance, and you would be qualified only on the payment on the $800,000 part. So if you did previously qualified for about $800,000, you now qualify for about a million dollars. And let's suppose that after 10 years, that home is now worth $2 million. Basically, what that means is that the state says well, you bought the house for a million dollars, it has doubled in value we gave you $200,000 So we're going to need $400,000 Back when you sell.
Now, you might think that that seems like a pretty steep price to pay for downpayment assistance, but looking at it this way You worried buyer who is sitting on the sidelines, you would have missed out on all of that. Whereas if you do this program, you will now have made $600,000. So yes, the state will absolutely get their portion of that money. But it means you're an even bigger winner if you do this kind of program. So here's the only bad news. Oh, I'm gonna have a bonus piece of good news at the end. So I'm gonna go over the bad news, we're gonna do kind of the Oreo sandwich approach here. So here's the only bad news $300 million has been allocated for this program. By my estimates, that means that this program will probably only serve three to 4000 people.
And when that money runs out, it will run out until it starts to be replenished by people paying the money back, which is a total bummer. So if you're interested in this, I don't think this money is going to last very long. I think you really need to act in the next two weeks or so. So one other final little piece of good news in this that I think is super awesome. And I haven't I haven't heard anybody else covering this yet. And I think this is really important. With this program, you can buy a property that is zoned for one unit, and has a rentable adu on it. So if somebody has built an adu and if that adu is rentable, you can buy that property using this using this program. And not only become a first time homebuyer, but you will also become a first time real estate investor and landlord in the process.
So this is a way to kind of heal birds with two stones, or really get your foot in the door on investing. And the state wants to actually help you do this. This is pretty amazing. We are going to be doing a webinar on this program next week to go through some of the specifics. And the rules, we're gonna have a link down below in the description of this video to sign up for that webinar. I hope to see some of you there. But really the one thing I can impress upon you is this is a bit of a second chance, right? If you feel like you missed the boat and home prices went up, this is kind of a reset, it's kind of going back to those previous prices. Also, if your other problems that you simply don't have enough of a downpayment at all, this will let you buy a home. And lastly, number three, if you could afford to buy a home, but you couldn't afford to buy the home that you needed.
That wasn't big enough or whatever. This could extend your buying power by one to $200,000 which could be huge. So again, really, this is a great program that the state has put out. It's one that I think really has the potential to work for a lot of people. I don't see a lot of downside in this. We're gonna be doing a webinar next week. We've got a sign up for that down below in the description. So definitely take a look at that. We hope to see you soon. Thanks for watching. Do not forget to like subscribe and hit that notification bell if you're seeing this on our YouTube channel. And once again, Steven me with domicile real estate where we are on a mission to help California's renters become homeowners. We're located here in Southern California, so namely Los Angeles and Orange County. So if that is you, we would love to hear from you. And we'll see you again real soon.