The California legislature is developing a program that would provide first-time home buyers with a down payment on their mortgages.
Senate President Pro Tempore Toni G. Atkins’s “California Dream for All” program would give 17% of the home price to the buyers in what is meant to be nearly tantamount to a down payment on a new mortgage. As soon as the buyer refinances or sells the home, a 17% share of the home would be returned to the state.
California’s median home price in 2021 was roughly $590,000, while the median income was just over $78,000 in 2020. Without a down payment, Californians with that median income could only afford $288,500 at the recent 6.04% interest rate. Only 26% of Californians were able to afford a median-priced home last year.
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The program would cost $1 billion for its first year in action and would subsequently need $1 billion more each year for the next 10 years, according to the Senate Budget Priorities plan.
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Atkins, whose first home, in San Diego, was 950 square feet and was purchased when she was in her 30s, introduced the bill in May. The Senate passed the budget necessary for the plan on Monday, though legislators continue to negotiate with Gov. Gavin Newsom (D).
