San Francisco and California Ballot Backstory · Why is this on my ballot?
Prop 37: summary
Creates Loan Program for Middle-Income Buyers of Qualified New Homes
Mark your own choices here. You may bring this sheet into the voting booth.
A YES vote means
California's housing finance agency, CalHFA, could sell up to $25 billion in bonds to lend middle-income buyers up to 17% of a new home's price.
A NO vote means
CalHFA could not sell these bonds. No new loan program for new-home down payments is created. CalHFA already has a few down payment help programs.
Both ovals are empty on purpose. The choice is yours.
If it fails
Nothing changes if it fails
If Prop 37 fails, the new loan program is not created. The California Housing Finance Agency (CalHFA) keeps its current down payment assistance programs, and current construction defect law stays.
Why it’s on the ballot now
Most home buyers pay some of the price up front, typically 3 percent to 20 percent. This is called a down payment.
The California Housing Finance Agency (CalHFA) runs programs to help low- and moderate-income Californians afford housing. A few offer down payment help, as loans that must be repaid.
Supporters say the statewide median home price is now over $930,000. They say a 20% down payment can mean saving over $186,000.
Supporters say California has the second-worst homeownership rate in the nation and has not built enough homes to meet demand.
Buyers must be California residents for one year, live in the home, earn under twice the area's median income, pay at least 3% down and be the home's first buyer. Price caps: about $1 million–$1.5 million by county, adjusted annually.
The money
Prop 37 lets CalHFA borrow up to $25 billion by selling revenue bonds. Buyers' loan payments would repay the bonds. The Legislative Analyst (LAO) finds no direct state or local costs. A committee supporting Prop 37 is sponsored by the California Association of Realtors. See the money chart for the latest filed totals.
Needs a simple majority (50% + 1) to pass Some measures need 55% or two-thirds of votes to pass. This one needs only a simple majority.Who bears the cost
Homebuyers who take a middle-class homeownership loan
The Legislative Analyst (LAO) says buyers’ monthly payments on the new loan would be designed to repay the bonds over time and cover the program’s administrative costs. CalHFA would have to keep buyers’ interest costs as low as possible.
State and local governmentsNo new cost
The LAO says Prop 37 would not result in direct state or local costs, because payments from homebuyers repay the bond investors. The LAO says other factors, unknown at this time, could affect its scope and impact.
The strongest case for and against
Strongest case for
Supporters, including the California Conference of Carpenters, CalHFA board member Fiona Ma and the California State Commanders Veterans Council, say many teachers, nurses and other workers can afford a monthly mortgage but not a large down payment. They say Prop 37 offers low-interest, fixed-rate loans with no cost to taxpayers. They say buyers must meet income limits, pay at least 3% down, live in the home and repay the loan. Supporters say helping buyers purchase new homes will help speed up building and create thousands of jobs. They say the measure requires annual audits, limits lender fees and has no early-repayment penalty.
Strongest case against
No argument against Prop 37 was submitted. The LAO lists unknowns that could shape the program's reach: whether investors will want to buy the bonds, how the loans' cost compares with other down payment help, and whether more homes get built and bought. Builders who choose a "qualified builder option" must meet higher labor standards. In return, they get different rules on construction defect claims, which the LAO says generally aim to give builders more flexibility.