In an effort to help first-time homebuyers, California may soon let illegal immigrants apply for state house loans.
Assemblyman Joaquin Arambula (D-Fresno) presented HB 1840 earlier this year. If approved, illegal immigrants would be able to benefit from the California Dream for All Program in the same way as citizens and permanent residents.
The Senate Appropriations Committee’s analysis, however, points out that the plan would probably put the Home Purchase Assistance program under “unknown considerable financial pressure.”
Arambula stated in February that “homeownership has historically been the principal way of creating generational wealth in the United States.” “Everyone should be able to benefit from homeownership’s social and economic advantages.”
In March 2023, the California Dream for All Program opened for applications, allowing potential first-time homebuyers to submit an application for a “loan” via the California Housing Finance Agency. Accepted applicants can apply a maximum of $150,000, or up to 20% of the purchase price, towards closing fees or a down payment.
The program has very liberal terms. First-time homeowners unable to exceed 120% of the county median income are eligible. For instance, the income cap in Los Angeles County is $155,000.
Furthermore, qualified candidates are exempt from making additional loan payments or even a down payment. In principle, the loan is repaid when the beneficiary sells, refinances, or transfers the property; however, Center Square claimed that in certain situations when residences have been put in trust, the loan may never be repaid because the program has no requirements requiring homeowners to do such steps.
The program got so many applications in its first year of operation that administrators had to institute a lottery method. This year, the program received 18,000 applications out of its $255 million budget, yet only 1,700 winners emerged.
Arambula’s bill would clarify that, although there is presently nothing in the program that specifically forbids them from participating, illegal immigrants are also permitted to apply.
“Leaving illegal people out of such programs, they lose out on an essential way to ensure personal stability and financial security for themselves and their families,” Arambula asserted.
Both the Assembly and the state Senate Appropriations Committee have previously approved HB 1840. Next, a full Senate vote will take place on the matter.
For the Home Purchase Assistance program, the measure would probably result in “unknown severe cost pressures,” according to an analysis by the Senate Appropriations Committee. Such pressures might be in “the millions a year,” according to estimates.
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