Undocumented immigrants in California could have a new path to homeownership

Undocumented immigrants could have a new pathway to the American dream of owning a home.

Assemblymember Joaquin Arambula (D-Fresno) introduced Assembly Bill 1840 last month to expand the eligibility requirement for a state loan program to clarify that loans for first-time buyers are available to undocumented immigrants.

The California Dream for All Shared Appreciation Loans program that launched last March by the California Housing Finance Agency offered qualified first-time home buyers with a loan worth up to 20% of the purchase price of a house or condominium. The loans don’t accrue interest or require monthly payments. Instead, when the mortgage is refinanced or the house is sold again, the borrower pays back the original amount of the loan plus 20% of the increase in the home’s value.

The original program was established in an effort to help low- and middle-income individuals buy a home, but the program doesn’t address eligibility based on immigration status, Arambula said.

“It’s that ambiguity for undocumented individuals, despite the fact that they’ve qualified under existing criteria, such as having a qualified mortgage,” he said in an interview. “Underscores the pressing need for us to introduce legislation.”

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If Assembly Bill 1840 is passed, it would broaden the definition of “first-time home buyer” to include undocumented immigrants.

Without the explicit status, undocumented individuals may be discouraged or left out of the opportunity to participate, Arambula said.

“Homeownership has historically been the primary means of accumulating generational wealth in the United States,” he said. “The social and economic benefits of homeownership should be available to everyone.”

The California Dream for All Shared Appreciation Loans program hit its applications limit of about 2,300 applicants in 11 days last year and the program was halted.

This year, the program will replace its first-come, first-serve basis with a lottery. Interested people can submit their application now, with the lottery taking place in April.

Another change to the program is its income eligibility threshold, which was 150% of a county’s median area and has been dropped to 120%. That means applicants must earn less than the threshold annually to be eligible. In Los Angeles County, the income threshold is $155,000.