Senate President pro Tem Toni Atkins revealed Wednesday that her proposed California Dream for All program would loan down payment funds to help first-time homebuyers.
Details of the plan were unveiled in advance of a hearing before a state Senate budget committee in Sacramento.
The program would draw on state funds to provide first-time homebuyers with an interest-free loan of 17% of the purchase price. The money would have to be repaid when the home is refinanced or sold.
“The California Dream for All program will give more people the chance to break free from the cycle of renting, become the first in their families to own a home, and make it possible for more people to set their children and grandchildren on a path to success,” said Atkins, who represents coastal San Diego County. “This has the ability to change people’s lives.”
She said she was able to buy a 950-square-foot home in her 30s, but with home prices now rising rapidly, “home ownership remains out of reach for far too many California families.”
The program could potentially lower mortgage costs by a third, she said, saving first-time buyers $1,000 a month in payments on average.
“For several years, the Legislature has been making progress on laws that help housing production,” Atkins said. “The California Dream for All program is the next step in addressing affordability, and helping families—particularly first generation homebuyers and those from communities of color who have faced systemic barriers to homeownership—create generational wealth.”
Funding for the program was estimated to require $1 billion annually over a 10-year-period.
The California Association of Realtors praised the plan, saying homeownership is a key to creating stronger communities throughout the state.
“Many Californians can afford a monthly payment, but need assistance with the down payment and closing costs,” aid Otto Catrina, president of the association. “We are pleased to support a plan that provides an opportunity for financial security and housing stability so all Californians can realize the economic and societal benefits homeownership provides.”
The program would reportedly be limited to about 2% of home sales statewide to avoid pushing prices higher. Participants would be chosen on a first-come, first-served basis, with eligibility limited to households making up to 150% of the median income in an area.