California Legislative Leader Wants To Spend $10 Billion To Help Families Buy Homes

Abstract

A top California lawmaker is proposing to spend $10 billion to help families buy homes in the state with some of America's highest housing prices. Democratic State Senate Leader Toni Atkins on Wednesday unveiled details of a proposal she's pushing to create a revolving fund that would provide interest-free loans for up to 30% of the purchase price of a home for low- and middle-income households. The median price for single family homes in California last year was $786,000, according to the California Association of Realtors, more than twice the nationwide average. There would be limits tied to a region's median home price allowing home buyers in the most expensive markets such as the San Francisco Bay Area to benefit. If the home price declines, Mr. Slater said, the state would be repaid if money is left over after the purchaser pays back their mortgage loan and recoups their portion of the down payment. According to a report from legislative staff, only about a quarter of California households can afford to buy a home at the state's median price of $590,000 for first-time buyers in 2021, with even smaller shares among Latino and Black families. While down payment assistance and other homeownership programs exist in California and nationwide, they typically provide 3% to 5% of a home's price, according to Ms. Owens.