Californians have approved Proposition 37, a ballot measure establishing a $25 billion loan fund aimed at assisting middle-class residents in purchasing newly constructed homes. The Associated Press called the vote on Tuesday night, with 60% of voters supporting the proposition.
The program, to be administered by the California Housing Finance Agency, will allow eligible homebuyers to secure fixed-rate mortgages covering up to 17% of a home's purchase price. This enables buyers to put down as little as 3% instead of the conventional 20%. The initiative intends to tap into private investment by having the agency borrow funds through the sale of bonds, which will then be lent to homebuyers. Repayments will be used to reimburse bondholders with interest.
To qualify, homes must be newly built or converted into housing and be priced below approximately $1 million in inland California or up to $1.5 million in Los Angeles, Orange County, and the Bay Area. Additionally, applicants must earn no more than twice the median income in their respective areas.
Despite voter approval, questions remain regarding the program's operational details and administration. Opponents, including the League of Women Voters of California and Reform California, have voiced concerns, arguing that the state should not be involved in mortgage lending. They also contend that the program fails to address the fundamental issues driving high housing costs in California.
This measure was among fourteen statewide propositions on the November 3rd ballot, each requiring voter approval to become law.