California Bill Introduces Controversial Home Loan Policy

California is on the brink of extending zero down payment home loans to illegal immigrants, leaving many to wonder about the policy’s ultimate impact.

At a Glance

California bill AB 1840 allows zero down payment home loans for undocumented immigrants.
The initiative aims to provide financial inclusivity and mitigate homeownership disparities.
The loan program is part of the California Dream for All Program.
The bill’s expansion could impose millions in annual costs, critics warn.

Legislative Details on Zero Down Payments

California’s Senate Committee has approved a significant and controversial new bill (AB 1840) that allows illegal immigrants to qualify for zero down payment home loans. The program is a part of the California Dream for All Program and aims to provide homeownership benefits to all individuals, regardless of immigration status. However, the bill has sparked heated debates.

The bill has passed the Assembly and would prevent the California Dream for All Shared Appreciation Loans program from denying applicants based on immigration status. The initiative is designed to offer loans of up to 20% of a home’s purchase price without any down payment or monthly payments. Repayment includes the original loan amount plus 20% of any increase in property value when the home is refinanced, sold, or transferred.

Impact and Costs

The loan program targets undocumented immigrants, aiming to include them for financial security and stability. However, the Appropriations Committee noted that expanding eligibility could create significant cost pressures, potentially amounting to millions annually. Assemblymember Joaquin Arambula emphasized the importance of the program, stating, “When undocumented individuals are excluded from such programs, they miss out on a crucial method of securing financial security and personal stability for themselves and their families.”

“When undocumented individuals are excluded from such programs, they miss out on a crucial method of securing financial security and personal stability for themselves and their families,” – Democratic Assemblymember Joaquin Arambula.

This year alone, 18,000 applicants sought assistance from the $255 million loan program, with only 1,700 receiving aid of up to $150,000 each. Critics are drawing parallels to past programs, including President George W. Bush’s down payment assistance initiative, which they say contributed to the 2007-2008 financial crisis.

The California Senate Appropriations Committee advanced a bill to allow undocumented immigrants to make use of the state’s zero down, no payment home “loan” program, an expansion the legislature says would create “significant cost pressures.”https://t.co/DIOaWbVhip

— KRNV (@KRNV) August 21, 2024

Criticism and Public Reaction

The bill has not been without its detractors. Republican state Sen. Brian Dahle highlighted that it prioritizes undocumented individuals over legal residents. San Diego County Supervisor Jim Desmond also criticized the proposal, calling it a waste of taxpayers’ money. “Once again, California has chosen to prioritize illegal immigration and fiscal irresponsibility over the needs of its citizens,” Desmond posted on X.

Californians have voiced their anger over the proposal, calling it ‘insane’ and suggesting the funds should go towards ‘homeless veterans’ instead. Additionally, the Senate Appropriations Committee passed the bill with a 5-2 party-line vote, and it now awaits direction from Governor Gavin Newsom to become law. Critics on social media echoed these sentiments, describing the plan as ‘nonsense’ and ‘evil.’