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Proposition 37 would create a state loan program to help middle-income Californians buy newly built homes and condos.
What’s at stake
The California Housing Finance Agency could borrow up to $25 billion, though it wouldn’t be required to, and lend it to homebuyers to cover part of their down payment. A coalition of real estate interests and labor unions placed this measure on the ballot.
Ballot language
Official title on the ballot: Creates Loan Program for Middle-Income Buyers of Qualified New Homes.
Language you will see:Authorizes $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of purchase price of a newly constructed home priced below about $1.5 million. Borrowers must be California residents, occupy the home, meet income limits, and pay at least 3% down. Bonds repaid by mortgage payments, not State. Fiscal Impact: No direct state or local costs.
What your vote means
- A “yes” vote means: The state would create a new homebuying assistance program. The state could sell up to $25 billion in revenue bonds to fund the program. Bonds would be paid back by homeowners’ payments on their home loans.
- A “no” vote means: The state would not be required to create a new homebuying assistance program.
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Understanding Prop. 37
The loans could cover up to 17% of a home’s purchase price. When paired with a typical mortgage, that would leave buyers with a 3% cash down payment, which works out to $24,000 on an $800,000 home. Buyers would repay the loan in monthly installments to private lenders. Anyone earning up to twice their area’s median income would qualify. If a homebuyer defaults, private lenders, not taxpayers, would absorb the loss.
What supporters say
Supporters point out that homebuyers typically face a down payment of 20% of a home’s value. In California, where even a fixer-upper can cost $700,000, that’s out of reach for most people. They argue the program would put homeownership within reach for middle-class families at no cost to taxpayers.
Notable supporters: The California Democratic Party, Gubernatorial candidate Xavier Becerra, the California Association of Realtors, the California Conference of Carpenters, SEIU and The Sacramento Bee editorial board.
What opponents say
Some opponents argue that state government shouldn’t be in the mortgage lending business. They also say the measure does little to address the underlying reasons housing in California is so expensive. Others say that while it would help more people buy homes, it would do so by letting them take on even deeper debt.
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Notable opponents: Reform California and the League of Women Voters.
Potential financial impact
From the summary of Legislative Office analysis:
No direct state or local costs. Because Proposition 37 uses the payments from homebuyers to repay bond investors, it would not result in direct state or local costs.
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LAist reporter Cato Hernández has been covering judicial elections since 2022 and they will help you navigate these particularly challenging pages on your ballot.
Follow the money
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Further reading
- California Budget & Policy Center: Will Prop. 37 make homeownership more affordable? It’s not guaranteed
- Public Policy Institute of California: How many might actually use the down payment assistance in Proposition 37?
- CalMatters video: Understanding Prop. 37
Rene Lynch contributed to this report.
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