In a move to make owning a home more attainable for all Californians, Assemblymember Joaquin Arambula, D-Fresno, is leading efforts to expand eligibility for the California Dream for All program. This program, which helps people buy homes by providing down payment assistance, is set to undergo some changes with Assembly Bill 1840. Here’s what you need to know about these potential changes and what they mean for you.
Introduction to the California Dream for All Program
The California Dream for All program was launched last year to help address the gap in wealth between different ethnic and racial groups in the state.
It offers financial help towards the down payment for a home, which is a big hurdle for many people.
Breaking Down the Financial Assistance Offered
This assistance can be up to 20% of the home’s purchase price or as much as $150,000. The idea is that when you sell the home, you’ll pay back the loan and a share of any increase in the home’s value.
Overwhelming Demand
Sounds pretty useful, right? Well, the program was so popular that all the money – $300 million worth – was claimed in just 11 days by 2300 people.
Challenges and Criticisms
There were issues, however, and some thought the program was only helping people who could already afford to buy a house, not those who really needed the help.
Reforming the Program
In an attempt to address concerns, the people in charge of the program are making some changes.
A New Lottery System
For the next round of funding, how they decide who gets help will be different. Instead of giving assistance on a first-come, first-served basis, they’re going to use a lottery system.
New Eligibility Criteria
Plus, they’re bringing in a new rule that says the person buying the house has to be the first one in their family to buy a house.
Prioritizing First-Time Homebuyers
This is in order to make sure that the people who get help are genuinely buying a home for the first time, and it means that neither they nor their parents can’t have ever owned a home before.
Income Threshold Adjustments
They’re also going to make it so that you can only get help if you make less than 120% of what the average person in your area makes – a big difference from last year’s figure of 150%.
Assemblymember Arambula’s Proposal
Now, here’s where Assemblymember Arambula comes in. He’s proposing a change to the program that would let undocumented immigrants use it, too.
Expanding Access to Undocumented Residents
Right now, only certain people can get help buying a home through this program. You have to be a U.S. citizen or a “qualified alien,” which means you have permission from the government to live here.
Homeownership for All?
But Arambula thinks that undocumented residents should be able to get help, too. He believes that everyone should have the chance to own a home, regardless of their immigration status.
The Case for Inclusivity
This is a big deal because a lot of undocumented immigrants already own homes in California. In fact, around 22% of them – that’s about 604,000 people – had homes in 2019.
These homeowners pay a lot of property taxes each year, which helps fund things like schools and roads.
Potential Economic Benefits
Arambula says this bill would make money for the state by putting the funding back into first-time homebuyers.
The state will make money back from the homebuyers when their homes increase in value, and they have to pay more over time.
Buying a Home as an Undocumented Resident
So, how do undocumented residents buy homes if they’re not supposed to be here? Well, they use something called an Individual Tax Identification Number, or ITIN.
Individual Tax Identification Numbers
It’s a number the IRS gives out so that residents who don’t have a Social Security number can still pay taxes and do other stuff like open a bank account or get a mortgage.
Challenges Faced by Undocumented Homebuyers
Getting a home loan when you’re undocumented can be hard, even with an ITIN. Because the regulations are different, it can be difficult to be approved for a loan.
Additionally, because undocumented residents won’t have a credit history, they may have to pay more upfront and pay higher interest rates.
The Impact of Arambula’s Proposal
Assemblymember Arambula’s proposal could make it easier for undocumented residents to buy homes by changing the rules of the program.
And since his proposal doesn’t cost the state any extra money, it might have a better chance of becoming a law compared to other proposals that cost a lot of money.
Implications for Prospective Homebuyers
So, what does all of this mean for you? If you’re thinking about buying a home in California, these changes could make it easier for you to get the help you need.
Expanding Opportunities for Homeownership
They could also make it easier for more people, including undocumented residents, to achieve the dream of homeownership.
Keep an eye out for updates on this bill – it could make a big difference for a lot of families.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.