Newsom vetoes Calif. bill allowing undocumented immigrants to get home loan assistance

Sept. 7 (UPI) -- California Gov. Gavin Newsom has vetoed a bill that would have extended home loans to undocumented immigrants under a program designed to increase homeownership in the state.

Newsom on Friday returned Assembly Bill 1840 to state legislators without his signature, according to a letter signed by the governor and obtained by media outlets.

"This bill seeks to prohibit the disqualification of applicants from one of California Housing Finance Agency's home purchase assistance programs based solely on their immigration status," he wrote.

"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.

"For this reason, I am unable to sign this bill," he concludes.

Under the California Dream for All program , the state provides down payment and closing costs assistance to first-time homebuyers by covering up to 20% of a home's value in the form of a loan.

The maximum loan limit is $150,000 in a state where housing costs are among the highest in the world.

The loans, which do not accrue traditional interest or require a monthly payment, can be deferred for the whole duration of the first mortgage or until the house is sold, upon which time the homebuyer repays the original down payment loan plus a share of any appreciation in its value.

Under the provisions of AB1840, which was approved by the California Assembly last week, any applicant for the Dream for All program who otherwise meets the requirements for a loan could not be disqualified by CalHFA solely based on their immigration status.

Introduction of the measure was met with angry reactions from conservatives and Republican lawmakers.

"Sacramento Democrats just voted to give illegal immigrants up to $150k for down payment assistance to buy a home," Republican Assemblyman Bill Essayli said in a social media statement on Aug. 29. "AB1840 would add yet another incentive for illegal immigrants to flow across our border. We don't need incentives, we need to close the border!"

The bill's sponsor, Democratic Assemblymember Joaquin Arambulo, told KNBC-TV last week the measure was needed to enhance the state's base of homeownership.

"Undocumented individuals have historically been removed from housing initiatives because of federal restrictions," Arambulo said. "Ensuring universal access by all borrowers will contribute to the overall success and vitality of California."