Gov. Gavin Newsom vetoed a bill on Friday that would have allowed some undocumented immigrants to qualify for up to $150,000 in state-backed home loans.
Under the bill, undocumented immigrants, who have been purchasing homes for years, would become eligible for the popular California Dream for All program. The legislation had sparked national controversy over the last few weeks, with critics attacking California’s pro-immigrant policies.
Newsom’s veto underscores his mixed record on immigrant rights legislation. While the state has extended Medi-Cal to all undocumented age groups under his administration, he has vetoed bills to provide cash assistance to undocumented seniors and extend unemployment benefits. Last year, he vetoed a bill that would have barred California prisons from sharing information about incarcerated non-citizens with federal officials.
In his veto message , Newsom cited budget constraints and the limited funds available for the program, which ran out earlier this year.
“Given the finite funding available for CalHFA programs, expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively,” Newsom said.
The Democrat-supermajority Legislature overwhelmingly passed the measure last month .
The legislation, Assembly Bill 1840, was introduced in February under Assemblyman Joaquin Arambula, D-Fresno. He and supporters argued the bill clarified that undocumented immigrants could apply for the home loan program run by the California Housing Finance Agency.
Arambula called Newsom’s veto “disappointing” on Friday.
“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,” Arambula said in a statement. “They are people who are responsible, work hard, and pay their ample share of taxes.”
For decades, lenders have worked with undocumented homebuyers since U.S. laws don’t restrict foreigners from buying real estate.
However, Republicans, and even Elon Musk , labeled the legislation unfair.
In a veto request to Newsom, Senate Republicans called it “another example in a long litany of taxpayer dollar giveaways by California Democrat politicians that encourage and reward illegal immigration.”
“We cannot afford this type of reckless spending,” said Senate Republican Caucus Chair Kelly Seyarto, R-Murrieta, in a statement on Friday. “I am grateful that the concerns of the people were heard and common sense prevailed.”
The home loan program, and its roughly $550 million in loans, has been in high demand since applications opened in 2023. It was created for first-time home buyers and includes several requirements including income thresholds, minimum credit scores and certain debt-to-income ratios.
The program uses a “shared appreciation” lending model and provides homebuyers with money toward a down payment — 20% of the home’s purchase price or up to $150,000. Homeowners must repay the loan and a share of the appreciation value whenever it sells again.
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