Newsom Vetoes Controversial Bill to Help Undocumented Immigrants Buy Homes

Gov. Gavin Newsom announced Friday that he vetoed a controversial bill that would have allowed undocumented immigrants to access a wildly popular first-generation homeownership loan program.

AB 1840, authored by Assemblymember Joaquin Arambula (D-Fresno), would have prohibited California’s Housing Finance Agency from disqualifying applicants from the California Dream For All Shared Appreciation Loan solely on an applicant’s immigration status.

Under the program, the state loans homebuyers 20% of the purchase price, or up to $150,000. Buyers repay the loan, without interest, when the home is sold, along with 20% of any appreciation on the home’s value.

The first round of funding in 2023 helped nearly 2,200 applicants purchase their first home. It was so popular — with the roughly $300 million in loans exhausted in just 11 days after applications opened — that the state changed the rules for this year’s $250 million funding round and selected applicants based on a lottery.

So far, about 100 applicants have closed on their homes, according to CalHFA spokesperson Eric Johnson.

As of Sept. 4, Johnson said about 18,000 people had applied for this year’s funding round. CalHFA predicts up to around 2,200 applicants will ultimately be awarded loans. However, with the state facing a major budget deficit this year, legislators declined to provide further funding in 2025.

“The bill that was sent to me was a program that had no money,” Newsom said. “I thought it was unnecessary and completely consistent with prior vetoes.”

Arambula’s bill incited lively discussion between Republicans and Democrats and was often the subject of race-baiting headlines. In late August, the California Senate Republican Caucus asked Newsom to veto the bill, saying, “legal California taxpayers are already struggling to purchase and maintain their homes.”

In Newsom’s veto message to the California State Assembly, he noted there is “finite funding available” for such programs, and expanding eligibility “must be carefully considered within the context of the annual state budget.”

“I’m deeply disappointed that Gov. Newsom today vetoed AB 1840,” Arambula said in a statement Friday. “The veto doesn’t change the fact that many people — including undocumented immigrants — dream of owning a home so that generational wealth can be passed to their children.”

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