SACRAMENTO, California — Gov. Gavin Newsom vetoed a bill on Friday that would have made some undocumented immigrants eligible for up to $150,000 in state-backed home loans, rejecting a proposal that ignited criticism from the right as immigration has become a major tension point in the election.
The Democratic governor’s veto comes a day after former President Donald Trump said he would ban undocumented immigrants from receiving home mortgages if he returns to the White House. It also takes the issue off the table ahead of Vice President Kamala Harris’ first scheduled debate against Trump next week. Karoline Leavitt, a Trump campaign spokesperson, described the California bill last month as “fundamentally unfair but typical Democrat policy.”
Newsom cited funding concerns in his veto message .
"Expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively," the governor wrote.
Newsom has repeatedly warned fellow Democrats in Sacramento not to provide cannonfire for Republicans in an election year, issuing pleas for them to tamp down the raging culture wars rather than provoke them with hot-button issues ranging from banning youth tackle football to reparations. On other proposals that were unlikely to become law, he pushed state Democrats to subordinate their virtue signaling so conservative media outlets couldn’t paint the state as wildly out of touch with America.
Newsom’s concerns have only grown since the elevation of Harris as the party’s nominee, since she hails from California. At a briefing Friday on an unrelated topic, the governor denied that he was trying to send a message to lawmakers in his party, saying he vetoed the bill on its merits.
“The bill that was sent to me was [on] a program that had no money, and it was expanding eligibility to a program that had no money,” Newsom said. “It seemed rather curious to me. So it was unnecessary and completely consistent with prior vetoes along those similar lines.”
Republican state Sen. Brian Dahle, who represents a rural Northern California district and ran against Newsom in the 2022 gubernatorial race, said in an interview that the governor did the right thing. But, Dahle said, he believes Newsom was in fact “reading the tea leaves” on the political implications of the bill.
“He's the master of gaslighting,” Dahle said. “I mean, they've been doing it forever. I've been here 12 years, and all they do is politics.”
The proposal, one of the more hotly debated bills in the Legislature during the final week of the session, cleared the statehouse in late August with some moderate Democrats dissenting. The bill was a regular topic on Fox News and drew the ire of Elon Musk on X.
Democratic lawmakers sought to frame the bill as one of fairness, saying it simply clarified that undocumented immigrants can apply for existing home loan programs run by the California Housing Finance Agency. One program, called California Dream for All , is specifically geared toward first-time, first-generation homebuyers and provides 20 percent in down payment assistance, up to $150,000. It is a shared appreciation loan in which the only interest the homebuyer pays would be 15 or 20 percent of the home’s increase in value upon selling the property, depending on their income level. The program has received state funding but is also run by the California Housing Finance Agency, which generates revenue through mortgage loans and not from taxpayers.
The program quickly ran out of its initial phase of funding in just 11 days after it launched last year, with more than 2,100 homebuyers securing loans. The Legislature approved $500 million in funding two years ago and $20 million in last year’s budget, but did not include any money in this year’s cycle.
Fresno Democratic Assemblymember Joaquin Arambula, who carried the measure, said he introduced the bill in response to an existing federal law that prevents undocumented immigrants from participating in state benefits without a state law providing for eligibility. To qualify for a loan, undocumented immigrants would have needed to have Social Security or taxpayer identification numbers — meaning they pay taxes.
Arambula said in a statement that he was "deeply disappointed" in the veto, contending that the bill was not about immigrant policies or the housing crisis.
"I have always believed this bill is about fairness," Arambula said. "The veto doesn’t change the fact that many people – including undocumented immigrants – dream of owning a home so that generational wealth can be passed to their children. They are people who are responsible, work hard, and pay their ample share of taxes."
But Republicans decried the bill as unfair. In a veto request to Newsom , Senate Republicans said “legal California taxpayers are already struggling to purchase and maintain their homes,” claiming the measure would “further stretch the limited public resources available to those who are following the law and want to purchase a home.”
Assemblymember Tom Lackey, a Southern California Republican, said on the floor before the measure passed that he has close friends who are undocumented, but it would not be fair to create a law that would “defy accountability on every front.”
“I have a heart for everybody that’s living in this country,” Lackey said. “But there are some people who have not yet found themselves worthy of taxpayer benefits.”
This is not the first time Newsom has rejected an immigrant rights bill. Last year, he vetoed a measure prohibiting state prisons from sharing information about noncitizens with federal officials, arguing that current law “strikes the right balance on limiting interaction to support community trust and cooperation between law enforcement and local communities.”
In 2019, Newsom quashed legislation that would have barred private security personnel from arresting immigrants in California prisons, noting concerns over negatively impacting prison operations.
Christopher Cadelago contributed to this report.
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