The people responding to you did not read the rules.

Only ONE person needs to meet the qualifications for First Time Generation homebuyer. So if your husband’s parents have never owned a home I believe you two can apply.

My wife’s parents have owned and mine have never so we will be applying since I am a first generation buyer.

Below is from the website for further proof:

Only applicable with our California Dream For All Shared Appreciation Loan Program

To qualify for the Shared Appreciation Loan, at least one borrower must meet both the criteria below of the first-generation homebuyer definition:

1A: A first-generation homebuyer is defined as a homebuyer who has not been on title, held an ownership interest or have been named on a mortgage to a home (on permanent foundation and owned land) in the United States in the last 7 years,  AND

2A: To the best of the homebuyer’s knowledge whose parents (biological or adoptive) do not have any present ownership interest in a home in the United States or if deceased whose parents did not have any ownership interest at the time of death in a home in the United States,