Proposition 37
Create low-cost mortgages for homebuyers
California’s Housing Finance Agency would be able (but not required) to borrow up to $25 billion to help would-be homebuyers purchase newly constructed houses and condos. These loans could provide up to 17% of a home’s purchase price, leaving buyers with a cash down payment of 3% if paired with a typical mortgage — $24,000 for an $800,000 home. Homebuyers would repay the loan in monthly installments to private lenders. Anyone earning up to twice the area’s median income would be eligible. Private lenders, not taxpayers, would be on the hook if homebuyers default.
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Summary
Support
House hunters can expect to face a down payment equal to 20% of the value of a home. In California, where $700,000 for a fixer-upper is considered a steal in much of the state, that’s not feasible for most people. This loan program will put the dream of homeownership within reach of the middle class without costing taxpayers a dime.
Oppose
State government should not be involved in the mortgage lending market. While this initiative will move money around, it won’t do much to address the underlying reasons that housing in California is so expensive.
People and organizations
Support
Oppose
Campaign finance
Proposition committees raise money to support or oppose propositions. Outside groups can also raise and spend money independently to influence outcomes.
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- Difference to other side
Support
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Proposition committees
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Outside spending
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Support
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Ballot text
CREATES LOAN PROGRAM FOR MIDDLE-INCOME BUYERS OF QUALIFIED NEW HOMES. INITIATIVE STATUTE. 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.
Source: California Secretary of State
