California governor vetoes bill to make immigrants without legal status eligible for home loans

SACRAMENTO, Calif. -- California Gov. Gavin Newsom vetoed a bill Friday that could have made immigrants without legal status eligible for loans under a state program offering assistance to first-time homebuyers.

The bill drew staunch opposition from Republicans well beyond California, with many arguing the state, known for its expensive housing market, should prioritize housing assistance for residents who are in the country legally. But proponents say the legislation would have improved the quality of life for hard-working families, regardless of their immigration status.

Newsom, a Democrat often seen as a potential presidential candidate in the future, said he could not sign the bill because of limited funding available for state housing assistance programs.

“Expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively,” Newsom wrote in a letter explaining his decision.

The proposal is among many state lawmakers have advanced in recent years aimed at expanding services for immigrants living in the country illegally. Another bill the Legislature sent to Newsom this year would require the state Employment Development Department to create a plan by March 31, 2025, to provide cash assistance to unemployed residents who are ineligible for unemployment insurance benefits due to their immigration status.

More than 700,000 low-income immigrants without legal status gained access to free health care earlier this year under the state's Medicaid program after Newsom and lawmakers agreed in 2022 to expand access to adults regardless of their immigration status.

Republican state Sen. Brian Dahle, who ran against Newsom in the 2022 gubernatorial race, said he was pleased with his veto because the bill would not have been fair to Californians who have long lived in the country legally and are struggling financially.

“This was a bad idea,” Dahle said. “We don't have the resources available.”

Republican lawmakers sent Newsom a letter last week urging him to veto the bill.

There was no money allocated for the California Dream for All Program, which provides loans to first-generation homebuyers, in the budget Newsom signed in June, according to the Department of Finance. $500 million was set aside for the program in the 2022 budget, and $20 million was allocated in the 2023 budget.

The state has approved home loans for nearly 4,000 families since 2023 under the program, Newsom announced in June. The program offers up to 20% and no more than $150,000 for a down payment or closing costs on a home, according to the California Housing Finance Agency.

The governor said at a news conference Friday that he would not speculate on whether he would have signed the home loan assistance bill if there were more funding available.

The legislation was aimed at expanding eligibility to a “program that had no money,” Newsom said, calling the proposal “unnecessary.”

Joaquin Arambula, a Democrat representing Fresno who authored the bill, said he was “deeply disappointed” with Newsom's decision.

“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,” he said in a statement. “They are people who are responsible, work hard, and pay their ample share of taxes. They will keep striving to achieve their dreams, and their contributions have strengthened our State’s economy, helping to build it into the fifth-largest economy in the world.”

State lawmakers sent Newsom more than 950 bills last month ahead of the Legislature's Aug. 31 deadline to pass bills, according to veteran lobbyist Chris Micheli. The governor has until Sept. 30 to decide which ones to sign into law.

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Austin is a corps member for The Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Austin on X: @sophieadanna