According to the article, the loans are repaid if and when the home buyer sells the home. From the article:
.....For example, if you bought a $500,000 home, you’d receive 20%, or $100,000, to help with your down payment and closing costs.
If you sell the home in the future, you’ll be required to pay back the 20% loan, plus 20% of the home’s appreciation.
For example, if the $500,000 home sells for $700,000, there is a $200,000 appreciation. You would owe 20% of that — or $40,000 — in addition to the original loan.
However, if you sell your home and it hasn’t grown in value at that time, you would only need to pay back the original 20% loan.
There are exceptions for borrowers whose incomes are less than or equal to 80% of the Area Median Income. For those borrowers, they would only need to pay back 15% of the home’s appreciation, along with the original loan. To see if your income qualifies, use the HomeReady
From the article:
Who is eligible to apply?
All borrowers, including co-borrowers, must be a first-time homebuyer, defined as someone who has not owned a property or lived in a home owned by a spouse during the past three years
At least one person must be a first-generation homebuyer meaning their parents do not own a home in the United States
All applicants must be California residents
Borrowers must plan to reside in the home as their primary residence
Applicants must make under the income limit threshold. Each California county will have a different income limit
Applicants must have a credit score of 680 or higher and a debt-to-income ratio of no more than 45%
Anyone who has ever been placed in foster care will be eligible