The biggest hurdle for many hopeful first-time home buyers, whether it’s a starter home in Sacramento or the dream home near Folsom Lake— isn’t the monthly mortgage payment. It’s the down payment.

With an average sale price of $535,000 in Sacramento saving 20% seems impossible for many.

Fortunately, the State of California is bringing back its popular, game-changing program. The CalHFA Dream For All Shared Appreciation Loan is returning for 2026, and for eligible Sacramento-area buyers, it could mean up to $150,000 in down payment assistance.

Before you jump in, note that it is a structured lottery system with specific eligibility requirements that differ from other programs.

What is the “Dream for All” Program?

The California Dream for All (DFA) program provides first-time buyers with a loan for up to 20% of the home’s purchase price (or appraised value) to be used for the down payment and/or closing costs.

The funding cap is $150,000.

What does “Shared Appreciation” mean?

This loan differs from traditional home loans/mortgages:

No Monthly Payments: That’s right. You don’t make any payments on the 20% assistance loan while you live in the home.

Repayment: You repay the original amount borrowed plus a share of the home’s appreciation only when you sell, refinance, or transfer the home.

How it Works: Generally, if you receive 20% assistance, you pay back 20% of the home’s increased value at the time of sale.

For example:

For example: You buy a home for $500,000. Dream for All provides a 20% down payment loan of $100,000. You take out a standard mortgage for the remaining $400,000. Because you have a full 20% down, you usually avoid paying monthly Mortgage Insurance (PMI), saving you hundreds every month.

Fast forward 5 years, and you sell the home for $600,000. The home has appreciated by $100,000. From the sales proceeds, you would pay the state back their original $100,000 loan, plus 20% of the appreciation ($20,000). You keep the other $80,000 of profit, plus all the equity you built by paying down your primary mortgage. It’s a win for you and for the state.

Am I Eligible in the Sacramento Region?

To qualify for this specific program in 2026, you must meet these key criteria:

1. The “First-Generation” Requirement

At least one borrower must be a First-Generation Homebuyer. This means you have not owned a home in the last 7 years and, to the best of your knowledge, your parents do not currently own a home in the United States.

2. 2026 Income Limits

The Dream for All program has strict income caps than. For the 2026 round, the maximum household income is:

Sacramento County: $191,000

Placer County: $191,000

El Dorado County: $191,000

Yolo County: $215,000

The 2026 Roadmap: How to Enter the Lottery

Unlike previous years, this is a randomized lottery. There is no advantage to applying the first minute the portal opens, but you must be prepared before the window closes.

Step 1: Get Your “DFA” Pre-Approval (Required) You must work with a CalHFA-approved lender to get a specific “DFA Lender Pre-Approval Letter”. You cannot enter the lottery without this document.

Step 2: Complete Homebuyer Education You must complete 8 hours of standard homebuyer education plus a specialized, free 1-hour online session on Shared Appreciation.

Step 3: Register for the Lottery The registration portal opens February 24, 2026, and closes at 5:00 PM on March 16, 2026.

Step 4: The Selection CalHFA will randomly select applicants and establish a waitlist for each region. If selected, you will have 90 days to find a home and get under contract.

Ready to Enter the Lottery?

The clock is already ticking. You need that specialized Pre-Approval Letter in hand before the portal opens on February 24th.

Click here to contact me and I’ll introduce you to my preferred local lenders who are specially trained to handle these CalHFA applications.

Let’s get you ready before the March 16th deadline!

Questions? Drop me a line. Steve Heard- eXp Realty of Northern CA, Inc – 916 718 9577 – steve@theheardgroup.com – DRE#01368503