UNDER CONSTRUCTION – DO NOT SHARE!
Middle-class homeownership or middle-class debt?
What’s the Background? Homeownership builds wealth and stability, and it is out of reach for far too many Californians. Only about 55% of households own their home, the second-lowest rate in the nation. The median California home sold for about $778,000 in June 2026 – putting a 20% downpayment near $156,000. Proposition 37 – the Middle-Class Homeownership and Family Home Construction Act – would have the California Housing Finance Agency (CalHFA) lend buyers most of that downpayment. The goal isn’t the problem. The problem is who Proposition 37 reaches, what it costs a buyer every month, and where it builds.
What would Proposition 37 do?
- Permit CalHFA to sell up to $25 billion in revenue bonds to create a downpayment assistance program.
- Authorize the use of funds for second mortgage loans of up to 17% of the purchase price for qualified buyers.
- Help homebuyers purchase newly constructed houses and condos as well as newly converted non-residential property priced below $1-$1.5 million (depending on location).
- Require CalHFA to keep interest costs “as low as possible” – but guarantee no rate.
- Limit qualified borrowers to homebuyers who:
- Have a minimum of 3% to put down on the home.
- Earn up to 200% of area median income – in Ventura County, that’s about $271,200 for a family of four. That’s double the county’s $135,600 median, and far above the state’s own $162,700 ceiling for a “moderate income” family of four.
- Need not be first-time or first-generation buyers and owe the state no share of their home’s appreciation.
- Require homebuyers to repay CalHFA – creating a second mortgage on top of the first.
- Let builders opt into a “qualified builder” track: higher labor and training standards in exchange for more flexible construction-defect liability rules.
| What Supporters Say | What They Leave Out |
| “Creates affordable homeownership opportunities for working and middle-class Californians. A 3% downpayment instead of 20% is a real difference for a family trying to buy.“ | It isn’t aimed at the families most locked out. Eligibility runs to 200% of area median income, and buyers need not be first-time or first-generation. White families are over-represented in the income band; Black and Latino families are under-represented. And with price caps of $1-$1.5 million, even 3% is steep: $21,000 on a $700,000 home nearly clears out a typical household’s savings. |
| “Proposition 37 encourages new home construction which leads to jobs growth in the building trades. The “qualified builder” tracks sets higher labor and training standards.“ | It steers building to the wrong places – and hides the carrying costs. Assistance is limited to new construction, pushing demand to the exurbs – away from locations where Californians work and live. New homes come loaded too: often carrying HOA dues, Mello-Roos taxes for infrastructure development, increased insurance premiums due to proximity to the wildland-urban interface, and transportation costs related to longer commutes. |
| “Proposition 37 has no cost to taxpayers. Loans are funded by private investors and repaid by home borrowers so funds are not diverted from Medi-Cal, schools, or CalWORKs. The LAO confirms there is no direct state or local cost.“ | No cost to the state – but a monthly bill for the buyer, possibly at a higher rate than the mortgage itself. CalHFA’s existing programs (MyHome, Dream for All) are deferred “silent seconds” – nothing owed until you sell or refinance. Prop 37’s bonds must be repaid out of the loans themselves, so buyers would likely pay monthy – and because second-mortgage bonds are riskier for investors, that rate could land above today’s roughly 6.5% first mortgage rate. |
| “Proposition 37 is backed by the California Democratic Party, the Realtors, and carpenters’ unions as well as Building a Better California.” | Follow the money. The Yes campaign raised nearly $13 million by June 30. It’s largest single donation – $6 million – came from Building a Better California, the group Google co-founder Sergey Brin has funded with over $100 million this cycle to pass Props 41 and 42 and defeat the Billionaire Tax. |