Quick Hit:

California's Senate Appropriations Committee has moved forward with a bill that would allow illegal aliens to access the state's zero-down, no-payment home loan program, a move raising concerns about significant cost pressures.

Key Details:

• The bill, AB 1840, prevents the state’s California Dream for All Shared Appreciation Loans program from denying applicants based on immigration status.
• The program offers loans up to 20% of a home’s purchase price with no down payment or monthly payments, repayable when the home is refinanced, sold, or transferred.
• The expansion could create "significant cost pressures," with unknown costs potentially in the millions annually.

Diving Deeper:

According to Just the News, California’s Senate Appropriations Committee has advanced a controversial bill aimed at expanding the state’s zero-down, no-payment home loan program to illegal aliens. The legislation, known as AB 1840, authored by Assembly member Joaquin Arambula (D-Fresno), seeks to make the California Dream for All Shared Appreciation Loans program accessible to all residents, regardless of immigration status.

“The social and economic benefits of homeownership should be available to everyone,” Arambula stated. He argued that excluding undocumented immigrants from such programs denies them a crucial path to financial security and stability.

The program currently allows eligible applicants to receive a state-backed loan covering up to 20% of the home’s purchase price—essentially the typical down payment—without requiring any down payment or monthly payments. Borrowers are expected to repay the original loan amount plus 20% of any increase in property value when the home is refinanced, sold, or transferred.

However, critics are raising alarms about the financial impact of this expansion. The Appropriations Committee’s analysis highlighted "unknown significant cost pressures" that could reach into the millions annually to fund the program's broader eligibility.

The expansion comes amid an already strained housing market in California, where the median home price hovers near $1 million. The high cost of housing means that the typical household needs an income of over $200,000 to afford a home—more than three times the median household income in the state.

This development recalls the home down payment assistance programs from the George W. Bush administration, which have been widely criticized for contributing to the 2007-2008 global financial crisis by inflating housing prices and lowering loan recipient quality. Critics warn that expanding California’s program to undocumented immigrants could exacerbate existing housing market pressures, making it harder for all residents to afford homes.