Down payment assistance silent second mortgage. Eligibility, underwriting, fees, and program operations.
Last revised: May 20, 2026. This handbook may be updated at any time without prior notice. Continued participation in the program constitutes acceptance of the most current version.
The Dream Simple Program (Dream Simple) is a deferred-payment, simple-interest subordinate loan offered by Dream Home Fund, a faith-rooted California 501(c)(3) nonprofit. Dream Simple is structured as a silent second mortgage and may be paired with any qualifying first mortgage to provide down payment assistance to eligible homebuyers.
Dream Simple is available only through mortgage lenders that have completed enrollment with Dream Home Fund. There is no enrollment fee, no per-loan fee, and no exclusivity requirement. Lenders that wish to offer Dream Simple to their borrowers should contact Dream Home Fund at partners@dreamhomefund.com to begin onboarding.
This program is for first-time homebuyers purchasing an owner-occupied primary residence. Geographic availability is the Sunbelt states to start, expanding as HUD approval takes effect, subject to each participating lender's state licensing and underwriting footprint.
Each borrower must:
Homebuyer education is required. At least one borrower on the loan must complete a HUD-approved homebuyer education course prior to closing. Any HUD-approved provider is acceptable. The borrower is responsible for any fee charged by the provider; the cost is not paid to Dream Home Fund. A completion certificate dated within one (1) year of closing must accompany the loan submission.
In addition to HUD-approved homebuyer education, at least one borrower must complete the Dream Home Fund Financial Education Course prior to closing. The course is administered by Dream Home Fund at no cost to the borrower and is delivered online. It covers: understanding the Dream Home Fund silent second, budgeting for the first year of homeownership, what to do if a borrower experiences financial hardship, estate and succession considerations for the silent second, and refinancing and re-subordination policies.
The course takes approximately one to two hours and concludes with a short quiz and a machine-verifiable completion certificate, which must accompany the loan submission. The Dream Home Fund Financial Education Course supplements but does not substitute for HUD-approved homebuyer education.
A first-time homebuyer is defined as a borrower who has not had an ownership interest in any principal residence, or resided in a principal residence owned by a spouse, during the previous three (3) years. All borrowers and co-borrowers who will reside in the home must meet this definition.
Non-occupant co-borrowers and co-signers are permitted on the first mortgage in accordance with the first-mortgage lender's guidelines. At least one borrower must be a first-time homebuyer and must occupy the property as a primary residence within 60 days of closing.
Eligible property types include single-family detached, attached townhomes, condominiums, planned unit developments (PUDs), and small multi-unit properties (2-4 units), in each case provided the property is occupied by at least one borrower as a primary residence. The property must otherwise meet the requirements of the first-mortgage lender and the applicable mortgage insurer or guarantor.
Ineligible property types. Manufactured homes, co-operatives (co-ops), vacation homes, second homes, and investment properties are not eligible for Dream Simple.
Dream Simple does not currently impose a borrower income cap. Borrowers must meet the income guidelines of the first-mortgage program. Dream Home Fund reserves the right to introduce income limits in the future as program funding and capital partner requirements evolve; any change will be announced in advance.
The term of the Dream Simple silent second matches the term of the first mortgage, not to exceed thirty (30) years. No monthly payments are required during the term. Repayment is deferred until one of the events described in Section VI (Repayment) occurs.
The Dream Simple silent second loan amount per transaction is the lesser of 3.5% of the purchase price or $45,000. The 3.5% structure aligns Dream Simple with the FHA minimum required investment; for purchase prices of approximately $1,285,714 or higher, the $45,000 cap binds. The actual amount may be lower based on the borrower's first-mortgage loan structure, combined loan-to-value limits, and program funding availability at the time of underwriting. Borrowers using first-mortgage products that require more than 3.5% down (for example, certain conventional programs) are responsible for any down payment in excess of the Dream Simple amount.
Loan-to-Value (LTV) on the first mortgage follows the applicable mortgage insurer or guarantor guidelines and the first-mortgage lender's underwriting standards. Maximum Combined Loan-to-Value (CLTV), including the Dream Simple silent second and any other subordinate financing, may not exceed 105%.
The first-mortgage lender is responsible for calculating and qualifying borrower income under investor guidelines. Dream Home Fund will rely on the lender's credit-qualifying income for purposes of administering the silent second. Income not used by the lender for credit qualifying will not be used by Dream Home Fund.
Dream Simple funds may be used solely for the borrower's down payment on the subject property. Dream Simple funds may not be used to pay closing costs, prepaid items, borrower debt, or any other purpose. Borrowers may not receive any cash back from the Dream Simple loan at closing.
The first-mortgage lender submits a complete file to Dream Home Fund for review of the silent-second component. Dream Home Fund will issue a DPA decision within 5 to 7 business days of receiving a complete file. Timing may vary based on volume and document completeness.
Submission packages should include the first-mortgage lender's complete underwriting file along with the Dream Home Fund DPA application and disclosures (see Section IV). Dream Home Fund underwrites the silent second independently and makes all DPA approval decisions independently of capital partners.
Dream Home Fund applies the following minimum representative credit score and maximum total debt-to-income (DTI) ratios on the silent second across all eligible property types. The first-mortgage lender's own credit and DTI minimums also apply; the more restrictive of the lender's standard and Dream Home Fund's standard governs. Representative credit score is the middle of three (or lower of two) FICO scores across all borrowers on the loan.
| Min Credit Score | Max DTI |
|---|---|
| 640 | 40.00% |
| 680 | 45.00% |
| 700 | 50.00% |
See the Dream Home Fund Program Matrix for an at-a-glance reference of these requirements alongside other program parameters.
| First Mortgage Type | Eligibility |
|---|---|
| FHA | Eligible |
| Conventional (Fannie Mae / Freddie Mac) | Eligible |
| VA | Eligible subject to VA subordinate-financing restrictions; case-by-case review |
| USDA Rural Development | Eligible subject to USDA subordinate-financing restrictions; case-by-case review |
| Non-QM / Private | Not eligible |
Dream Simple may be combined with other down payment assistance programs (such as state HFA grants, municipal DPA, or employer-assisted housing) provided that the Dream Home Fund silent second remains in second lien position at all times. Layered programs that require Dream Home Fund to subordinate below another DPA second are not eligible. The first-mortgage lender is responsible for confirming lien priority on the title commitment and at recording.
Dream Home Fund charges a $500 Program Administration Fee per Dream Simple loan, payable directly to Dream Home Fund at closing and itemized on the borrower's Closing Disclosure. The fee covers program eligibility review, subordinate loan administration, compliance review, funding authorization, second lien administration, document preparation, closing coordination, funding disbursement, and final file completion and loan boarding.
There is no application fee, no pre-approval fee, and no charge of any kind unless and until the silent second actually funds. No fees are collected if the transaction does not close. Standard third-party closing costs (homebuyer education, appraisal, title, escrow, recording, and first-mortgage lender fees) remain the responsibility of the borrower or are handled through the first-mortgage transaction and are not paid to Dream Home Fund.
The following Dream Home Fund loan documents must be executed by the borrower and submitted by the first-mortgage lender to Dream Home Fund for purchase or recording at closing:
Final loan document templates are being prepared by counsel and will be provided to enrolled lenders upon completion. Until templates are finalized, no Dream Simple loan can be closed.
Dream Home Fund will subordinate the silent second behind a new first mortgage to allow the borrower to refinance the first mortgage on a rate-and-term basis (no cash out), provided that:
Subordination is not limited to a single refinance; Dream Home Fund will consider subordination on each qualifying rate-and-term refinance. Cash-out refinances trigger immediate repayment of the silent second. Dream Home Fund will not subordinate to a new first mortgage that permits the borrower to extract equity ahead of the silent second.
Although Dream Home Fund will subordinate on rate-and-term refinances, the silent second continues to accrue simple interest on its outstanding balance while it remains in place. Dream Home Fund recommends that borrowers consider paying off the silent second voluntarily at refinance, either from savings or by wrapping the balance into the new first mortgage, to stop further interest accrual.
Repayment of the principal and accrued interest on the Dream Simple silent second is deferred for the life of the first mortgage and becomes due and payable at the earliest of the following events:
Interest: Simple interest accrues on the outstanding silent-second principal balance at a rate equal to the borrower's first-mortgage note rate plus one percent (1.00%) per annum. No monthly payments are required on the silent second. Accrued interest is added to the principal balance and becomes due at repayment.
Prepayment: The borrower may pay off the Dream Simple silent second in full or in part at any time before a triggering event, without any prepayment penalty.
Dream Home Fund will furnish a payoff statement upon request to the borrower, the borrower's authorized representative, or the closing agent handling the triggering transaction.
Questions regarding the Dream Simple Program, lender enrollment, borrower file submission, or program operations may be directed to:
Dream Home Fund is an Equal Housing Opportunity organization. Dream Simple is open to all eligible borrowers regardless of religion, race, color, national origin, sex, disability, familial status, age, or marital status, in full compliance with the Fair Housing Act and the Equal Credit Opportunity Act.