California to End Home Loan Assistance Program Within Days Due to Demand
Officials believed the $300 million allocated to the program could keep it going for months, according to loan officers who attended agency presentations.
Instead, it became clear within days that the money would run out almost immediately.
“Demand for the program was unprecedented and we have paused our lending as of this morning,” California Housing Finance Agency spokesman Eric Johnson said via email Friday.
On Thursday, the agency sent a bulletin to lenders telling them all funds could be committed by April 10.
“All loans must be rate-locked no later than 3:00 p.m. PST on April 12, 2023, or when the available funds are fully committed, whichever occurs first,” the bulletin said. The program began offering loans on March 27.
The agency said the program helped 2,300 Californians buy their first homes.
“CalHFA is extremely proud of this successful program and excited to make such a profound difference in the lives of so many Californians who have achieved the dream of home ownership,” the bulletin said.
Affordable housing is notoriously hard to come by in California, and the new program gave buyers a significant boost in purchasing power. House prices have also finally started to fall, drawing buyers into the market despite rising interest rates.
Scott Evans, executive vice president of Cross Country Mortgage, said he thought the program was great, but that state officials underestimated its appeal.
“It got people back, re-engaged in buying a house and created a lot of activity,” said Evans, who estimated his team had pre-approved probably 100 people.
Now his company must go back to those applicants and redo their approvals on different terms, he said.
