California Senate Committee Advances Bill to Include Undocumented Immigrants in Home Loan Program.
The Center Square — The California Senate Appropriations Committee has moved forward with a bill that would allow undocumented immigrants to access the state’s zero down, no-payment home loan program. The proposed change is expected to bring significant financial pressures, according to state legislators.
Assemblymember Joaquin Arambula, D-Fresno, who authored the bill, stated, “The social and economic benefits of homeownership should be accessible to everyone. The California Dream for All Program should include all individuals.” He emphasized that excluding undocumented people from these programs limits their ability to achieve financial security and stability.
The bill, AB 1840, which has already cleared the Assembly and is awaiting a Senate floor vote, seeks to prevent the California Dream for All Shared Appreciation Loans program from excluding applicants based on immigration status. This program offers loans up to 20% of a home’s purchase price, equivalent to a typical down payment, with no upfront payment or regular payments required.
Under the current setup, the state loan can be repaid when the home is refinanced, sold, or transferred. Borrowers must repay the original loan amount plus 20% of any increase in the property’s value. There are no specific rules about how long a property must be held, which could potentially lead to situations where the loan is not repaid if held in certain types of trusts.
The Appropriations Committee’s analysis predicts that expanding the program could impose “unknown significant cost pressures,” possibly in the millions annually, as it would require additional funding to support the increased number of eligible applicants.
This year, 18,000 people applied for the $255 million loan program through a lottery. Only 1,700 applicants were selected, receiving up to $150,000 each for down payments and closing costs.
Historically, President George W. Bush’s home down payment assistance program for less qualified individuals has been criticized for contributing to the housing bubble that led to the 2007-2008 global financial crisis by inflating housing prices and reducing loan quality.
In California, where the median home price approaches $1 million, households need an income exceeding $200,000 to afford a home, more than three times the median household income.