California's New Plan: Taxpayers Might Soon Be Funding Home Loans For Illegal Migrants – Here's What You Need To Know

Californians are in an uproar over a recent proposal that could allow undocumented immigrants to receive taxpayer-funded assistance for home purchases. Under a potential expansion, the California Dream For All Shared Appreciation Loan program, which already represents a lifeline for thousands of first-time homebuyers, is now pitting the state into a raging debate.

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The Democratic-controlled California Senate Appropriations Committee passed a bill, AB 1840, which would expand the program to undocumented immigrants. Assemblymember Joaquin Arambula, a Fresno Democrat, introduced the bill. It passed in the Assembly and now goes to the Senate for a vote. If this hurdle is cleared, it will land on Gov. Gavin Newsom’s desk for final approval.

San Diego County Supervisor Jim Desmond was among the first to voice his concerns. “California is once again prioritizing illegal immigration over the needs of its citizens,” Desmond posted on social media platform X. “This is not just another handout – it’s an enormous overreach that unfairly burdens law-abiding taxpayers.”

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His words echoed the sentiments of many Californians, who took to social media to express their outrage, labeling the plan as “insane,” “nonsense,” and “evil.” Some even called for a “taxpayer revolt,” suggesting that the funds would be better spent on assisting homeless veterans.

The program has proven highly popular given California's current housing crisis, where the average price for a single-family home hovers around an astonishing $904,000. The loans offered through the program are interest-free and don’t require monthly payments. Instead, borrowers repay the original loan plus 20% of any increase in the home's value when the mortgage is refinanced or the property is sold.

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According to the LA Times, when the $300 million program opened to approximately 2,300 first-time buyers in May 2023, the funds were exhausted in less than two weeks. In response, California officials later tightened the program’s rules, requiring at least one applicant to be a first-generation homebuyer. A lottery system was also introduced to select recipients. 

A new amendment introduced by Fresno Democrat Assemblymember Joaquin Arambula seeks to expand the program’s reach by stating that applicants “shall not be disqualified by the agency solely based on the applicant’s immigration status.” According to Pew Research Center estimates, that change could potentially benefit an estimated 1.85 million undocumented migrants who have settled in California.

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“Homeownership is the number one driver of intergenerational wealth in the United States,” said Arambula in an interview with LA Times. “The social and economic benefits of homeownership should be available to everyone.”

While the loan program is due to be repaid when the property is sold or refinanced, there are concerns about how broadening eligibility to undocumented immigrants could impact applicant numbers and the program’s overall costs.

At a time when California is still battling its lingering budget deficit – the latest was $46.8 billion, bridged by spending cuts and increased taxes on businesses – many wonder how the state plans to balance its budget while instituting new programs like this one. The Senate vote comes under scrutiny, and all eyes are on the potential implications for California taxpayers.

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