Marysville Appeal-Democrat

New California home buyers could soon get government cash for down payment

- Tribune News Service Los Angeles Times

California could soon help first-time home buyers with their down payments and mortgage costs under a proposed $1-billion program to make homeowners­hip more financiall­y feasible for lowand middle-income residents.

Senate President Pro Tem

Toni Atkins (D-san Diego) first introduced the idea last year of the state stepping in to help more California­ns purchase their first homes amid a competitiv­e housing market and rising out-of-pocket costs. On Wednesday, she unveiled more details of the program, a state budget proposal to lend prospectiv­e buyers 17% of a home’s purchase price as a way to lower their mortgage costs and reduce their down payments.

Once a homeowner sells, transfers or refinances their house, according to the program’s outline, they would pay back to the revolving fund an amount equal to 17% of the home’s current value — even if the amount is larger than the initial loan.

“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. This has the ability to change people’s lives,” Atkins said in a statement.

The program is included in this year’s Senate Democratic Caucus budget priorities, and proponents are asking for $1 billion annually over the next decade to maintain the fund. Those dollars could help about 8,000 first-time buyers each year, according to a report from the state treasurer’s office in coordinati­on with the nonprofit group California Forward.

The report noted that some

35% of the 555,858 homes sold in California last year were bought by first-time owners, but that most home prices continue to be out of reach for the majority of households.

“Homeowners­hip is a key element to securing housing and economic security for working California­ns, building intergener­ational wealth and creating stronger communitie­s across our state,” Otto Catrina, president of the California Assn. of Realtors, said in a statement. “Many California­ns can afford a monthly payment but need assistance with the down payment and closing costs.”

The proposal coincides with other legislativ­e efforts in recent years to ramp up production in California and ease the financial burdens caused by the state’s limited housing supply. Ninety-three percent of likely voters said that housing affordabil­ity is a problem in California, according to a March survey by the nonpartisa­n Public Policy Institute of California.

Gov. Gavin Newsom signed a bill last year, also written by Atkins, to let homeowners build duplexes on their single-family properties or split their lots to construct up to four units. Lawmakers this year have introduced legislatio­n to set aside more money in the budget for housing and homelessne­ss and to bolster homeowners­hip opportunit­ies through new and existing loan programs. Final budget negotiatio­ns between Newsom and lawmakers are scheduled to begin after the governor unveils a revised spending plan on Friday.

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