California Advances Loan Program

Big news out of California this week as a key Senate committee advanced a bill that’s stirring up quite the conversation. This bill, if passed, would allow migrants and undocumented immigrants to tap into a state program designed to help more people become homeowners. Now, we're talking about the "Dream For All" shared-appreciation loan program, which is all about making homeownership more accessible, especially for first-time buyers.

So, what exactly is this program? Essentially, it’s a down-payment assistance program where the state steps in to help cover that initial cost, which can be a huge barrier for many. Here’s how it works: if you qualify and use the program, when you eventually sell or transfer the home, you repay the original loan, plus a share of the home’s value appreciation. It’s a win-win—homebuyers get a leg up, and the state recoups its investment when the property value increases.

This week, the Senate Appropriations Committee gave the bill a green light with a 5-2 party-line vote. What’s notable about this bill is that it would make it illegal to disqualify anyone from the program based on their immigration status.

This is a big deal because, while foreign-born individuals can already buy homes in the U.S. using an individual tax identification number (ITIN) instead of a Social Security number, this bill opens the door even wider. It ensures that the benefits of homeownership, such as financial security and stability, are available to everyone, regardless of their legal status.

Democratic Assemblymember Joaquin Arambula, who authored the bill, argues that excluding undocumented individuals from such programs leaves them without a crucial opportunity to build a secure future. With the bill having already cleared the state assembly, it’s now up to the state Senate and Governor Gavin Newsom to make it law.

But not everyone is on board. The bill has faced criticism from Republicans, with state Sen. Brian Dahle calling it an "insult" to California citizens who are already struggling to afford homes in a market where prices are sky-high. He’s argued that priority should be given to those in the state legally.

Interestingly, the "Dream For All" program has already been incredibly popular, perhaps too popular. Earlier this year, the program’s initial $300 million in loans were claimed in just under two weeks! That’s why the program’s administrators decided to switch from a first-come, first-served model to a lottery system, aiming to distribute the funds more equitably.

This year, 18,000 people applied for the $255 million available, but only 1,700 were lucky enough to receive up to $150,000 each towards their down payment and closing costs.

The Appropriations Committee did note that expanding this program could create “significant cost pressures,” potentially costing the state millions annually to accommodate the broader eligibility.