California Puts $25 Billion Proposition 37 on Ballot for 17% Homebuyer Loans
Updated
Updated · Fox News · Oct 26
California Puts $25 Billion Proposition 37 on Ballot for 17% Homebuyer Loans
3 articles · Updated · Fox News · Oct 26
Summary
California voters in November will weigh Proposition 37, which would let the state housing agency issue up to $25 billion in revenue bonds for down-payment assistance on newly built homes.
Under the plan, buyers could put down 3%, receive a state-backed second mortgage covering up to 17%, and finance the remaining 80% with a traditional mortgage.
On an $800,000 home, that structure could cut upfront cash needs from $160,000 to $24,000 but add $136,000 in debt; at illustrative 6.5% and 7% rates, monthly principal and interest would rise about $900 to $4,950.
The measure would be repaid through borrowers' mortgage payments rather than the general fund, and California's legislative analyst estimates no direct state or local government costs.
The broader question is whether easier financing lowers housing costs at all: supporters say it could spur construction, while critics argue extra purchasing power may simply push prices higher unless supply expands.