With the immigration crisis, California lawmakers have proposed expanding the state’s zero-down, no payment home “loan” program to illegal immigrants. “Assembly Bill 1840 is an insult to California citizens who are being left behind and priced out of homeownership,” said Republican State Senator Brian Dahle. “I’m all for helping first-time homebuyers, but give priority to those who are here in our state legally” Dahle added.
However, bill author Assemblyman Joaquin Arambula, a Democrat from Fresno, said in an interview with the Los Angeles Times, “The social and economic benefits of homeownership should be available to everyone.”
Assembly Bill 1840 is the California Dream for All Shared Appreciation Loans program administered by the California Housing Finance Agency. It started in 2023 with $300 million set aside for 2,300 applicants, and ran out of funds in just 11 days. In 2024 the program will require applicants to be first-generation home buyers and reduce maximum income thresholds to 120% of county median household income. Under the program, applicants can secure “loans” of up to 20% of a home’s purchase price to first-time home buyers — the cost of a down payment — with zero down payment to the CHFA, and no payments on the “loan.”
The Center Square writes the state’s so-called “loan” can potentially be repaid “when the home is refinanced, sold, or transferred, with the borrower paying back the original loan amount plus 20% of any increase in value on the property. Unless a property loses more than 80% of its purchase price, the state will not directly lose money, but without any provisions on how long a property can be held for — including what happens with certain kinds of trusts, such as right-of-survivorship trusts — it’s not clear if the state can ever get its money back if a family decides to hold on to the home.”
“With the typical home in California requiring nearly triple the median household income to afford, 45% of Californians are considering leaving the state due to the high cost of housing” adds the publication.