California Dems Pass Bill to Give Illegal Immigrants $150,000 Home Loans — but the Program Is Broke

Republicans in California are blasting a bill passed by the state legislature this week that would allow illegal immigrants to receive up to $150,000 in taxpayer-backed home loans, arguing that it will exacerbate the state’s housing crunch while also providing a new incentive for people to come into the country illegally.

“I didn’t know it was possible to make a border crisis and the housing crisis worse with just one vote, but Democrats found a way,” California Assembly Republican leader James Gallagher said on X on Thursday.

Republican assemblyman Bill Essayli called the bill “offensive,” writing on X that “California democrats love illegal immigration so much they offer many incentives for them to come here.”

But it’s unclear that Governor Gavin Newsom will sign the legislation, which could provide ammunition to Republican presidential nominee Donald Trump, a border hawk who has consistently blamed Democrats — including Vice President Kamala Harris, a California native — for the border crisis.

And even if Newsom does sign the legislation, it’s unlikely that any illegal immigrants will receive money from the program anytime soon: the program is broke, and lawmakers haven’t approved new funding.

Democrats, who have a supermajority in the California legislature, passed Assembly Bill 1840 on Wednesday. The aim of the legislation is to prohibit discrimination for the California Dream For All home loan program on the basis of immigration status, according to a bill analysis.

The program offers prospective first-time homebuyers loans of up to $150,000 for down payments or closing costs. At least one borrower must be a first-generation homebuyer. Eligible prospective homebuyers are selected for vouchers via a random lottery.

Democrat state assemblyman Joaquin Arambula of Fresno, who sponsored the bill, said that “limiting access to homeownership assistance programs perpetuates inequality.”

“The social and economic benefits of homeownership should be available to everyone,” he said in a statement. “As such, the California Dream for all program should be available to all.”

But most illegal immigrants still wouldn’t qualify for the assistance, even under Arambula’s bill.

The California Dream program requires first-time borrowers to meet the Federal National Mortgage Association’s standards, including having either a valid Social Security Number or an Individual Taxpayer Identification Number. Arambula’s bill appears to be targeted at so-called Dreamers, illegal immigrants who were brought into the United States as children and who are in the county with Deferred Action for Childhood Arrivals status.

Democrats said that passing the legislation was “the right thing to do.” Republicans, on the other hand, called it a “handout” that will encourage more illegal immigration.

“Welcome to California, where illegal immigrants get free health care, free food, and now a free home with 0 percent down,” Assemblywoman Kate Sanchez said during floor debate. “This is not rocket science. If you’re giving out free stuff, more people are going to come.”

Republican state senator Brian Jones said the “unfair policy sends a dangerous message: ‘Come here illegally & claim your $150,000 home loan!”

“Americans should be very worried about a Harris-Waltz (sic) Administration taking this nationwide,” the state GOP minority leader wrote on X.

X owner Elon Musk, who is shutting down the company’s San Francisco headquarters in the coming weeks, also took aim at the legislation this week. “Seems like half of Earth should move to California, given all the incentives to do so,” he wrote on his social media platform.

When the California Dream program was rolled out last year, its $300 million in funding dried up in eleven days. And the money didn’t go to the populations it was intended to.

The program’s designers hoped the money would benefit residents of formerly redlined communities. San Francisco National Public Radio affiliate KQED reported in April that the program was “designed to have the state step into the role of a parent or grandparent in assisting their offspring buy a home.”

Eric Johnson, spokesman for the California Housing Finance Agency, told the station that the program’s aim is to “help those who may not have had the benefit of generational wealth in buying their first home.”

But only 3 percent of the roughly 2,200 people who received grants were black, according to KQED, while 35 percent were white, 33 percent were Latino, and 19 percent were Asian. And a disproportionate number or grantees were residents of Sacramento, the state capital.

Lawmakers injected more than $200 million more into the program for a second round of grants. The deadline to apply was in April. The money again ran out after eleven days in June.

The California Housing Finance Agency is not accepting new applications for the California Dream program because all of its funding has been allocated.

While the California Dream program has been popular among prospective first-time homebuyers, critics note that it does nothing to reduce building regulations to fix the state’s housing crisis, and may stoke demand leading to increased home prices.

The median home price in California topped a record $900,000 earlier this year, according to California Association of Realtors data.