A controversial bill that would have helped undocumented immigrants in California buy homes was vetoed Friday morning by Gov. Gavin Newsom, who cited limitations in the program's existing budget.
House Bill 1840, introduced by its lead author, Assemblyman Joaquin Arambula (D-Fresno), would have allowed undocumented immigrants to apply alongside other qualified applicants for the California Dream for All shared appreciation loan program. The program offers interest-free loans of up to $150,000 to low-income first-time homebuyers to cover down payments and fees.
According to the California Housing Finance Agency (CalHFA), the program initially received $300 million in taxpayer funds, which funded nearly 2,200 loans. The Legislature later provided an additional $225 million, which went toward helping about 1,700 additional applicants.
“Given the limited funding available for [the CalHFA] “Programs and expanded program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively,” Newsom said in his veto message.
At a news conference in Sacramento on Friday, Newsom declined to elaborate on his decision, reiterating that he rejected the proposal because of the cost. “The bill that was sent to me was a program that had no money in it,” he said.
According to CalHFA, new applications for the program are not currently being accepted because all of its funding has been allocated.
As the bill moved through the state Senate and Assembly last month, lawmakers debated whether undocumented residents, specifically Mexican immigrants, should be eligible for a program that is currently unfunded.
Many Republican lawmakers argued that the bill would take away opportunities from American citizens or encourage illegal immigration to the state.
In a statement, Arambula expressed disappointment with Newsom's decision and said he believed the bill was aimed at equity.
“As I have said before, the bill is not about immigration policy or the housing crisis,” he said. “No bill can solve those problems on its own.”
Arambula said the governor’s veto does not “change the fact that many people, including undocumented immigrants, dream of owning a home so they can pass on generational wealth to their children.”
The California Dream for All Shared Appreciation Loan Program was launched last year, with the goal of helping low- and middle-income homebuyers build generational wealth.
It offered qualified buyers a loan worth up to 20% of the purchase price of a home or condo, with a limit of $150,000. These loans do not accrue interest and do not require monthly payments.
Instead, when the mortgage is refinanced or the home is sold again, the borrower pays back the original loan, plus 20% of the increase in the home's value since the borrower purchased it.
AB 1840 would have expanded eligibility to include undocumented individuals, but they would be required to provide a taxpayer identification number or Social Security number when applying for a loan. The IRS issues taxpayer identification numbers regardless of immigration status because nonresidents may also be required to file tax returns.
Arambula previously told The Times that the current program's eligibility requirements were ambiguous about allowing undocumented people to apply, “despite the fact that they are qualified under existing criteria, such as having a qualifying mortgage.”
Without explicit inclusion, undocumented people may be discouraged or excluded from the opportunity to participate, Arambula said.
