Newsom Vetoes Bill Designed to Give $150,000 Home Loans to Illegal Immigrants, Citing Funding Concerns

Governor Gavin Newsom vetoed a Democrat-led bill on Friday that would have allowed illegal immigrants in California to apply for the state’s first-time homebuyers assistance program.

The legislation, if signed into law, would have made illegal immigrants eligible for up to $150,000, or 20 percent, in state-backed homeownership loans or down-payment assistance. The shared appreciation loan program, called California Dream for All, is funded by the state and run by the California Housing Finance Agency. Both chambers of the Democrat-controlled California legislature passed the measure last week, but Newsom rejected it over funding concerns.

“This bill seeks to prohibit the disqualification of applicants from one of California Housing Finance Agency’s (CalHFA) home purchase assistance programs based solely on their immigration status,” Newsom wrote in his veto message. “Given the finite funding available for CalHFA programs, expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively.”

“For this reason, I am unable to sign this bill,” he concluded.

The bill drew a wave of public pressure from conservative outlets and figures, like Fox News and Elon Musk. It also received pushback from California senate Republicans, all nine of whom urged Newsom in a letter to veto the newly passed measure because it would, in part, enable the state’s homebuyers assistance program to prioritize illegal immigrants over military veterans.

“Such good news! Governor Newsom listened to our calls and rightfully VETOED the bill to give illegal immigrants free home loans,” Republican senate minority leader Brian Jones said in a statement reacting to the veto. He denounced the bill as “insulting and unfair” for Californian citizens.

While state Republicans applauded Newsom for striking down the measure, which would have burdened the state budget, Democratic lawmakers were disappointed by the news.

“I’m deeply disappointed that Governor Newsom today vetoed Assembly Bill 1840. The bill had won wide support in the Assembly and passed the Senate to get to his desk,” said Democratic state representative Joaquin Arambula, who introduced the bill.

“AB 1840 simply sought to clarify language in the existing California Dream for All program to make it clear that undocumented immigrants can apply,” he added. “The fact is, right now, anyone can apply who is a first-time homebuyer who can meet the program’s financial requirements that include securing a bank loan or mortgage. As I’ve said before, the bill is not about immigrant policies or the housing crisis. No single bill can solve those issues.”

Established in 2022 as part of the 2022-23 state budget, the California Dream for All program initially received $500 million in funding. The program used $300 million of the allocated funds when it rolled out last year; it blew through the $300 million in eleven days.

The governor’s decision comes one day after former president Donald Trump said, if reelected, he would ban illegal immigrants from obtaining home mortgages because the record-high immigration influx is driving up housing costs.

“That’s why my plan will ban mortgages for illegal aliens,” Trump said Thursday, without elaborating on said plan.