Newsom vetoes bill that would have offered mortgage assistance to undocumented immigrants

A controversial bill that would have helped undocumented immigrants in California buy homes was rejected Friday morning by Gov. Gavin Newsom, who cited limitations of the program’s existing budget.

Introduced by its lead author, Rep. Joaquin Arambula (D-Fresno), Assembly Bill 1840 would have allowed undocumented immigrants to apply alongside other qualified applicants for the California Dream for All Shared Appreciation Loan Program. The program offers interest-free loans of up to $150,000 to low-income first-time homebuyers to cover down payments and expenses.

The program initially received $300 million in state funds, which funded nearly 2,200 loans, according to the California Housing Finance Agency (CalHFA). The Legislature later provided an additional $225 million, which helped about 1,700 additional applicants.

“Given the limited funding available for (CalHFA) programs, expanding program eligibility must be carefully considered in the broader context of the state’s annual budget to ensure we are managing our resources effectively,” Newsom said in his veto message.

At a news conference in Sacramento on Friday, Newsom declined to elaborate on his decision, reiterating that he rejected the proposal because of the cost. “The bill that was sent to me was for a program that had no money,” he said.

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According to CalHFA, no new applications are currently being accepted for the program because all of its funds have been allocated.

As the bill moved through the state Senate and Assembly last month, lawmakers debated whether undocumented residents, particularly Mexican immigrants, should be eligible for a program that currently has no funding.

Many Republican lawmakers have argued that the bill would deprive American citizens of opportunities or encourage illegal immigration into the state.

In a statement, Arambula expressed disappointment with Newsom’s decision, saying he believed the bill was about fairness.

“As I’ve said before, this bill is not about immigration policy or the housing crisis,” he said. “No single bill can solve those problems.”

Arambula said the governor’s veto does not “change the fact that many people, including undocumented immigrants, dream of owning a home so that generational wealth can be passed down to their children.”

The California Dream for All Shared Appreciation Loan Program was launched last year, with the goal of helping low- and moderate-income buyers build generational wealth.

It offers qualified buyers a loan of up to 20% of the purchase price of a house or apartment, capped at $150,000. These loans do not generate interest and do not require monthly payments.

Instead, when the mortgage is refinanced or the home is resold, the borrower repays the original loan, plus 20% of the increase in the home’s value since the borrower purchased it.

Learn more:Governor Newsom signs budget to close California’s $46.8 billion budget gap

AB 1840 would have expanded eligibility to undocumented individuals, but they would be required to provide a taxpayer identification number or Social Security number when applying for a loan. The IRS issues taxpayer identification numbers regardless of immigration status because nonresidents may also need to file tax returns.

Arambula previously told the Times that the eligibility requirements for the existing program were ambiguous about whether undocumented people could apply, “despite the fact that they qualify under existing criteria, such as having a qualified mortgage.”

Without explicit inclusion, undocumented people risk being discouraged or excluded from the opportunity to participate, Arambula said.

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This article was originally published in the Los Angeles Times.