A new bill that would allow some undocumented immigrants to receive loans to buy homes is sparking debate as it passes through the California Legislature.
Assembly Bill 1840 would make it clear that a person who applies for a loan under the California Dream for All Program cannot be disqualified solely because of their immigration status. It passed the state Senate with a 25-14 vote.
The program is run by California Housing Finance Agency, which generates revenue “through mortgage loans, not taxpayer dollars,” according to the agency’s website.
Their program provides a shared appreciation loan — which typically means that first-time homebuyers do not pay interest. Instead, they only have to pay back the original loan amount, plus 20% of any home value appreciation. The loan covers 20% of the purchase price or up to $150,000 to cover a down payment or closing costs.
The loan must be paired with a 30-year fixed interest rate first mortgage from the California Housing Finance Agency and the recipient does not have to make payments on the share appreciation loan until the first mortgage is paid off.
In a general statement on the program’s mission, Gov. Gavin Newsom stated: “As part of the state’s comprehensive efforts to improve affordability, build generational wealth and unlock access to housing, Dream For All is paving the way home for thousands of Californians. This program is more than just financial assistance – it’s about providing a pathway for individuals to achieve their California dream.”
Gov. Gavin Newsom (D-CA) speaks to reporters following the CNN Presidential Debate between U.S. President Joe Biden and Republican presidential candidate, former U.S. President Donald Trump June 27, 2024 in Atlanta, Georgia.
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It is not clear if Newsom intends to sign the bill. A two-thirds vote in each chamber of the legislature would be needed to override a veto — which could be achieved with the votes in favor of the bill thus far.
If the new bill is passed or signed into law, undocumented borrowers would be able to apply for the housing loan. However, they would be required to have a valid Social Security number or Individual Taxpayer Identification Number in addition to meeting existing legal residency and documentation requirements.
This language would allow, for example, people who pay taxes but are not legal citizens, such as recipients of the Deferred Action for Childhood Arrivals policy, known as DACA, to apply for the loan.
Supporters say the bill is intended to allow all those who pay taxes in the state to be able to qualify for the assistance.
“Homeownership is one of the largest contributors to building wealth for low and middle-income families,” said Cynthia Gomez, a deputy director at The Coalition for Humane Immigrant Rights in an April hearing on the bill. “However, it’s also well understood that there are many barriers to access for homeownership, in particular for communities of color. California is solution-orientated, and we have implemented various policies that have made homeownership a reality for Californians.”
State Assembly member Joaquin Arambula, D-Fresno, addressed a crowd including farmworkers and undocumented workers at Fresno City Hall March 2023.
Laura S. Diaz/Fresno Bee via Tribune News Service via Getty Images
Critics argue that the money should not be geared toward people who are undocumented and that noncitizens should not be eligible for state programs.
“I just can’t get behind using our limited dollars for people who continue, who are in this country undocumented when we have very limited funds,” said state Rep. Joe Patterson during a hearing on the bill in April.
The Trump campaign told Politico that it believed the bill to be “fundamentally unfair but typical Democrat policy.”
The Senate Appropriations Committee said in a mid-August meeting that the cost pressures on the program, if it were to undergo an expansion, are “unknown,” but the California Housing Finance Agency (CalHFA) indicated “that any costs to update program regulations to prohibit application disqualification based on immigration status would be minor and absorbable,” according to filings in the legislature on the bill.
The debate comes as immigration has continuously ranked as a top issue for 2024 voters, according to Gallup .
California has the largest undocumented population in the country, with an estimated population of 1.85 million undocumented immigrants in 2021, according to the Pew Research Center.
At the same time, California is dealing with a housing crisis, with a growing homeless population and increasingly high costs for housing.
California mid-tier homes are twice as expensive as the typical U.S. home — selling at more than $700,000,according to California’s Legislative Analyst’s Office, and 28% of all homeless people in the U.S. live in California, the point-in-time report from the U.S. Department of Housing and Urban Development recorded.
A new bill proposed in California is aiming to provide home loan access to undocumented immigrants who pay taxes. The bill, known as AB 1876, would allow undocumented immigrants who can provide proof of income and have been paying taxes for at least three years to qualify for home loans through the state’s CalHFA program.
This proposed legislation comes at a time when the housing market in California is becoming increasingly unaffordable for many residents, including undocumented immigrants who are often excluded from traditional lending options due to their immigration status. By allowing these individuals to access home loans, proponents of the bill argue that it will help promote homeownership and stability within immigrant communities.
Supporters of AB 1876 point out that undocumented immigrants contribute billions of dollars in taxes each year, yet are often denied access to basic financial services such as home loans. By providing these individuals with the opportunity to purchase a home, they argue that it will not only benefit the individual and their family, but also the broader community by increasing property values and stimulating economic growth.
Opponents of the bill, however, argue that it could incentivize illegal immigration and put taxpayers at risk if borrowers default on their loans. They also raise concerns about the potential impact on the housing market and whether undocumented immigrants have the financial stability to take on a mortgage.
Despite these concerns, the bill has garnered support from a wide range of organizations, including immigrant rights groups, housing advocates, and some lawmakers. If passed, AB 1876 would make California the first state in the country to offer home loans to undocumented immigrants who pay taxes.
As the debate over this bill continues, it raises important questions about access to financial services for all residents, regardless of their immigration status. Whether or not AB 1876 becomes law, it has sparked a conversation about how to support immigrant communities and promote homeownership for all Californians.
