State will cover half of the cost of a new home for home buyers in California: program details

To provide more equitable access to home ownership, California Senate Democrats have included in the budget a program to subsidize the cost of buying a new home. This program can cover up to half of the cost of a property. The edition told in more detail Yahoo!

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The California Dream for All program, which Democrats first outlined in April in their Build Back Boldly budget plan, pays for and owns up to 45% of a home for the buyer purchasing their first home. The plan said the program would allow Californians to buy their first home with a “silent partner,” which would significantly lower costs and help narrow the gap in racial inequality.

“Generation after generation, the rich get richer,” the budget plan says. “As has happened so often throughout the country’s history, the situation is exacerbated by racist barriers built to hold communities back—and the impact of those barriers is still being felt today.” The first step to achieving the California dream of thriving in the world and building family wealth begins with owning a home.”

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The plan says that this program:

• Saves families over $ 12 a year;
• Establishes the California Dream Fund "to be funded with a lump sum of available state or federal funds";
• Allow new home buyers to cooperate with the foundation, which will own a share of the house, up to 45%;
• Will target “underrepresented homeowner communities” and “those with high student debt”.

According to the plan, eligibility is based on income level and home price. He clarified that eligibility requirements will differ from region to region, "to reflect the reality that incomes and home prices vary widely across California." Further selection criteria were not disclosed.

In a California Public Policy Institute survey of Californians, nine in 10 respondents said they see housing affordability as a problem, and nearly one in three said they are considering leaving the state because of it.

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Housing prices across the country rose sharply during the pandemic for a variety of reasons, including a surge in demand driven by teleworking and rising prices for new buildings due to higher prices for lumber. Some developers have slowed down construction due to the fact that they do not keep up with demand and prices.

Goldman Sachs said last month that the housing shortage could last for years. Rising prices have worried housing experts such as Daryl Fairweather, chief economist at Redfin.

“When the pandemic ends, a home will cost much more than it does now, making home ownership even more unaffordable for many Americans,” Fairweather said in a statement. “This means a future in which most Americans do not have the opportunity to accumulate wealth through home equity, and it will exacerbate inequality in our society.”

The California program is designed to make home ownership affordable for many residents. Legislators next week intend to discuss the budget, including this program, with Governor Gavin Newsom.

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