California is pushing ahead with a plan to offer state-backed home loans to undocumented immigrants, despite facing a massive budget deficit.
This move is stirring up debate about the state’s priorities and financial management.
The California Dream For All Shared Appreciation Loan program, which helps first-time homebuyers with down payments, may soon be open to residents without legal status.
A bill to expand the program, AB 1840, just cleared a key Senate committee.
When the program launched last year with $300 million in funding, it was so popular that the money ran out in less than two weeks.
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The loans cover up to 20% of a home’s purchase price and don’t require monthly payments or interest.
Assemblyman Joaquin Arambula, who introduced the bill, believes everyone should have a shot at homeownership.
“Assembly Bill 1840 would change existing law to allow illegal immigrants to be eligible for the California Dream for All Fund, which provides interest-free loans for a down payment on a home for first-time buyers.
The bill was introduced by California Assemblyman Joaquin… pic.twitter.com/TZtRw6PncM
— Chief Nerd (@TheChiefNerd) March 6, 2024
But not everyone agrees. San Diego County Supervisor Jim Desmond said, “California is in dire financial straits, yet lawmakers continue to prioritize programs that incentivize illegal immigration and strain local resources.”
The timing of this expansion is raising eyebrows.
California’s budget deficit has ballooned from $32 billion last year to an estimated $60 billion now.
This is a stark turnaround from the $100 billion surplus the state had just two years ago.
The state’s money troubles come from a mix of factors, including job losses, inflation, and a cooling tech sector.
To deal with the shortfall, California has already cut spending and temporarily hiked taxes on businesses.
“Assembly Bill 1840 would change existing law to allow illegal immigrants to be eligible for the California Dream for All Fund, which provides interest-free loans for a down payment on a home for first-time buyers.
The bill was introduced by California Assemblyman Joaquin… pic.twitter.com/TZtRw6PncM
— Chief Nerd (@TheChiefNerd) March 6, 2024
Some lawmakers question the wisdom of expanding the loan program now. “Many legal California residents can’t afford a home in their own state,” said State Senator Brian Jones. He argues that helping undocumented immigrants buy homes with taxpayer money is unfair, especially given the budget crunch.
This California initiative comes as Vice President Kamala Harris proposes a similar national program offering down payment help to first-time homebuyers.
It’s not clear if her plan would include or exclude undocumented immigrants.
The bill now heads to the full Senate for a vote.
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If it passes, it will land on Governor Gavin Newsom’s desk for final approval.