CA down payment program paused after all $300 million of its funds were allocated in just 11 days

LOS ANGELES (KABC) -- Buying a home for the first time can be a challenge and for many, the hardest part is getting the down payment.

"It's really frustrating to see these first-time homebuyers going out there and getting outbid over and over again because they don't have the down payment to compete with a lot of these cash buyers," said real estate agent Sarah Moore.

The most recent data shows just 34% of potential first-time buyers can afford a home in California.

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That's why the California Housing Finance Agency (CalHFA) set up a loan assistance program called "Dream for All" in which $300 million was set aside for first-time buyers to help with their down payment.

The money was used up in just 11 days.

"All the funds have been completely committed," said CalHFA spokesman Eric Johnson. "We have about 2,500 people who are potentially going to be in their first homes once these loans close."

According to data from Zillow, home values across the state have quadrupled since 2000, going from about $183,000 in January 2000 to $719,000 in February 2023.

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Homes are more expensive in Southern California where the median sale price in both Los Angeles and Orange counties is $835,000. The Inland Empire is less expensive at $511,000, which is still up 46%.

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"There's a low inventory, with interest rates going up that puts even more pressure on us, prices have not sunk to the lowest, I don't think yet, so we'll see what happens," said Johnson.

And it's not just a local problem.

"It's a national problem," said Moore. "There's an incredible shortage of properties and the demand far outreaches the supply and as long as that continues, we're going to continue to have this problem."

The California Legislature is currently working on next year's budget, which has to pass by June 15. Officials hope the loan assistance program will get more funding.