Creates Loan Program for Middle-Income Buyers of Qualified New Homes
Creates a state-run loan program using up to $25 billion in revenue bonds to help eligible buyers purchase qualified new homes.
The program would provide secondary, fixed-rate loans covering up to 17% of a home’s purchase price for eligible California residents. Homeowners’ loan payments would be intended to repay the bonds and program costs, rather than direct state or local funding.
What it does
- Authorizes the California Housing Finance Agency to issue up to $25 billion in revenue bonds for middle-class homeownership loans.
- Limits each loan to up to 17% of a qualified new home’s purchase price, with the buyer contributing at least 3% from nonborrowed, nongrant funds.
- Limits eligibility to applicants who have lived in California for at least one year, meet income limits, and agree to occupy the home as a primary residence within 60 days of closing.
- Limits eligible homes to first sales of new single-family homes or residential conversions of nonresidential buildings, subject to county-based price caps tied to 125% of the one-unit conforming loan limit.
- Requires fixed-rate loans, limits lender origination fees, bars early-payment penalties, and allows borrowers to request temporary hardship deferrals of monthly interest payments under agency rules.
- Creates an optional builder program with specified labor requirements and different procedures for certain construction-defect claims.
Who it affects
- California residents with household income at or below 200% of the area median income who seek to buy an eligible new home.
- Homebuilders, lenders contracted by the California Housing Finance Agency, and buyers of newly built or converted homes.
- Homeowners and builders involved in construction-defect claims concerning homes built under the optional builder program.
Context
California Housing Finance Agency programs already provide some down-payment assistance loans for eligible homebuyers. State revenue bonds are repaid from program-related payments rather than the state General Fund. The Legislative Analyst estimates no direct state or local costs.
A yes vote means
A yes vote would authorize up to $25 billion in California Housing Finance Agency revenue bonds to fund secondary fixed-rate loans for eligible buyers of qualified new homes, repaid through homeowners’ loan payments.
A no vote means
A no vote would not create this revenue-bond-funded middle-class homeownership loan program or its optional builder provisions.
Fiscal effect
The Legislative Analyst's Office estimates:
- No direct state or local costs.