California’s Prop. 37 would create $25B loan program for middle-class homebuyers
By Tim Fang
With housing costs a top concern among Californians, voters casting their ballots in the November election are considering a multi-billion dollar plan that aims to help prospective middle-class homebuyers by offering down payment assistance.
The measure, Proposition 37, would authorize up to $25 billion in bonds to offer homebuyers fixed-rate mortgages for up to 17% of the purchase price of a “qualified new home.”
Prop. 37 qualified for the November ballot after supporters submitted more than 600,000 valid signatures earlier this year.
Former state Senate Majority Leader Bob Hertzberg of Los Angeles, the measure’s chief proponent, said in April that voters “have the chance to unleash a wave of new home construction across our state and make the dream of homeownership a reality for more middle-class Californians.”
According to the measure’s official title and summary, borrowers would pay at least 3% down, must be California residents for at least one year and earn less than 200% of the area median income. Homes must be new construction or the first sale of a converted nonresidential property and must be priced below $1 million to $1.5 million depending on the county, with the limit adjusted annually.
Prop. 37 comes as housing costs in the Golden State remain the highest in the nation. According to the California Association of Realtors, which supports the measure, the median price for a single-family home in the third quarter was $894,630. Meanwhile, several counties in the San Francisco Bay Area and in Southern California recorded median prices above $1 million.
Other supporters of the measure include the United Nurses Associations of California, California Conference of Carpenters and State Treasurer Fiona Ma.
In the state’s official voter guide, opponents of the measure did not submit an argument against Prop. 37. The League of Women Voters has issued a statement against Prop. 37, saying the loan program could reinforce racial and economic gaps and that there is no requirement that the homes are near jobs, transit, schools or services.
“California needs homeownership programs that lower families’ total costs, confront racial barriers to building wealth, and support strong communities. Prop 37 does not meet that test,” the league said in its voter guide.
