# Prop 37: Up to $25B state-backed loans for middle-income buyers of newly built homes

URL: https://www.californiapeople.org/props/prop-37

- number: 37
- title: Up to $25B state-backed loans for middle-income buyers of newly built homes
- type: Initiative statute
- sponsor: A coalition of real estate interests and labor unions; the California Association of Realtors is the largest funder

**Our read: Lean no.** Up to $25B in state-backed loans for buyers of new homes. The Realtors fund it, and no one knows how many homes it would finance.

## Key findings
- The Realtors put up **$18.4M of the $33.6M** for Yes. **No one is funding the No side**, and no ballot argument against was filed. [^1]
- The state's last down-payment program, **Dream For All, ran through $300M in 11 days** in 2023. It reached 2,564 buyers with an average loan of ~$112K. One loan officer estimated **30–50% could have bought without it**. [^2][^3]
- Only **newly built** homes qualify, which steers demand to builders. Builders who meet labor standards also get **new limits on homeowner defect lawsuits**, including a 30% cap on contingency lawyers' fees. [^4][^5]
- **No one has estimated how many homes this would finance.** It depends on whether investors buy the bonds. [^4]

## Track record
| Program | $ | Buyers helped | Lesson |
|---|---|---|---|
| Dream For All, Phase 1 (2023) | $300M | 2,564 | First come, first served; 65% of initial buyers white, 34% Hispanic or Latino [^2][^3] |
| Dream For All, Phase 2 (2024–25) | ~$260M + $300M | ~1,700 awards; 18,000+ applicants | Lottery and first-generation priority broadened access; 75%+ people of color [^6] |
| Both phases | ~$860M (sum of phases) | 4,000+ total | Phase 2 drew 18,000+ eligible applications for about 2,000 awards; repaid funds must be recycled to keep going [^6] |
| **Prop 37** | **Up to $25B** (bonds, not tax money) | Unknown | 17% second loans on new homes only |

## What it does
- CalHFA can sell up to $25B in revenue bonds for second loans covering up to 17% of the price. The buyer puts at least 3% down. [^4]
- The buyer must be the home's first purchaser, with household income up to 2x the area median, and the price must be under set limits. [^4] CalMatters adds that buyers must live in the home. [^2]
- Builders who opt into labor standards get a changed defect process: claims must name each homeowner and each defect, builders can repair and then get a signed release, and they lose these protections if they sell a home more than 25% above the cap. [^5]
- Today, builders can be sued for defects in new homes for up to 10 years (4 for rentals). Condo insurance runs 3–4x what a comparable rental costs. [^5]

## Money and conflicts
- The Realtors earn commissions on more sales. Builders get buyers for new homes plus liability relief. Carpenters' unions get labor standards. All three are funders or signers. [^1]
- The ballot argument was signed by Treasurer Fiona Ma, who sits on the CalHFA board that would run the program and is now running for Lt. Governor. [^1][^7]
- The bonds are repaid from buyers' loan payments, not the General Fund. Buyers owe monthly payments on the second loan. [^4]

## Does it solve a lasting problem?
- It helps some middle-income buyers with the down payment, but it adds demand without lowering the cost to build. The defect-liability change does address one real reason so few condos get built in California (3% of new multifamily units, vs. 38% in Canada). It just comes bundled with a benefit for the people funding the campaign. [^5]

## If you vote yes: accountability
**Bottom line:** Up to $25B in loans would be run by one agency, CalHFA, and the measure requires **no public reporting and no audits**. [^4] Taxpayers aren't on the hook if loans fail (bondholders are), but buyers are. [^5]

### Who runs it, and who answers for it
- **CalHFA** decides how many bonds to sell, sets lending standards, and picks how much risk to take. [^4][^5] Its executive director is Tony Sertich. [^8]
- **CalHFA's board** includes the State Treasurer. Treasurer Fiona Ma signed the ballot argument for Prop 37 and is now running for Lt. Governor. [^1] **The next Treasurer (Kounalakis or Hawks) inherits that seat.**
- **No agency is named** to enforce the builders' labor standards or check buyer eligibility. [^4]

### Lessons from the last program
- Dream For All ran through $300M in 11 days. One loan officer estimated that 30–50% of buyers could have bought without it. [^2][^3] Demand outran the money about 9 to 1, and a lottery later broadened who got loans. [^6]

### Who to press, and what to ask for
1. **CalHFA and its board** (meetings are public):
   - Publish quarterly data by county: loans made, buyer income, price, builder, and late payments and defaults.
   - Use a lottery or need-based priority, not first come, first served.
   - Publish which builders opt into the labor standards and defect-lawsuit limits, and how many defect claims each one gets.
2. **Your Assemblymember and state Senator:** add an annual public report and a State Auditor audit after the first $5B, since the measure has neither.

### Public records to request (CPRA)
Anyone can file a California Public Records Act request (the state's version of FOIA), with no reason required. Agencies must respond within 10 days, or 24 in unusual cases. [^9]

> **To CalHFA:** Under the California Public Records Act (Gov. Code § 7920.000 et seq.), I request records sufficient to show, for each Dream For All loan (2023–2025), with personal information removed: county, purchase price, loan amount, household income as a percentage of area median income, and current status (current, delinquent, paid off, or defaulted). I prefer a spreadsheet.

## Both sides
- **For:** CA Democratic Party, Becerra, Realtors, carpenters, SEIU, Sacramento Bee, SF Chronicle. It opens homeownership to people locked out.
- **Against:** League of Women Voters, Reform California, OC Register, SD Union-Tribune. The state shouldn't be a mortgage lender, and buyers would carry more debt.

## Official voter guide (condensed) with annotations
- Official title: Creates Loan Program for Middle-Income Buyers of Qualified New Homes. Initiative Statute.
- Summary: "Authorizes $25 billion in bonds to offer eligible buyers fixed-rate mortgages" on newly built homes under about $1.5 million, covering up to 17% of the price. Buyers must live in the home, meet income limits and put at least 3% down. Bonds are repaid by mortgage payments, not the state.
- Fiscal impact: No direct state or local costs.
- A YES vote means: The state would create a new homebuying assistance program, funded by up to $25 billion in revenue bonds repaid by homeowners' loan payments.
- A NO vote means: The state would not be required to create a new homebuying assistance program.
- Argument for: "Zero Taxpayer Cost—No Taxpayer Risk." Private bond investors, not taxpayers, fund low-interest mortgages that keep homeownership in reach for the middle class.
- Argument against: No argument against was submitted.
- Supporters: United Nurses Associations of CA, CA Conference of Carpenters, Treasurer Fiona Ma
- Opponents: None submitted

Annotations (what the booklet leaves out):
- (summary) Not in the summary: a "qualified builder option" that gives builders meeting labor standards more flexibility on construction-defect claims before homeowners can sue. It weakens an existing homeowner protection. [^4]
- (general) Funded by the California Association of Realtors ($18.4M of $33.6M). Realtors, builders and construction unions benefit most directly; only brand-new homes qualify. [^1]
- (pro) Signer Fiona Ma sits on the CalHFA board that would run this program and is on your ballot for Lieutenant Governor. [^1]
- (con) No argument against made it into the booklet, but the League of Women Voters and Reform California oppose it, saying it adds buyer debt and puts the state in mortgage lending. [^2]

## Sources
[^1]: Official Voter Guide arguments. https://vig.cdn.sos.ca.gov/2026/general/pdf/prop37.pdf
[^2]: CalMatters guide. https://calmatters.org/california-voter-guide-2026/proposition-37-homebuyers-loan/
[^3]: CalMatters via KQED, Dream For All recipients (Apr 2023). https://www.kqed.org/news/11946353/californias-dream-for-all-home-loan-program-ran-through-300-million-in-11-days-who-got-the-money
[^4]: LAO. https://lao.ca.gov/ballot/2026/prop37-110326.pdf
[^5]: GrowSF (supports; summary of defect provisions). https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-37/
[^6]: CalHFA, Dream For All lessons learned (Jan 2026). https://www.calhfa.ca.gov/about/press/reports/DFA-LessonsLearned-2026-01.pdf
[^7]: Ballotpedia, Fiona Ma profile. https://ballotpedia.org/Fiona_Ma
[^8]: CTCAC agenda, Sept 1, 2026 (lists CalHFA executive director). https://treasurer.ca.gov/sites/default/files/ctcac/CTCAC_Meeting_Notice_and_Agenda_9-1-2026.pdf
[^9]: First Amendment Coalition, CPRA deadlines. https://firstamendmentcoalition.org/resources/explainers/explainer-cpra-delays
[^10]: CA SoS contributions. https://www.sos.ca.gov/campaign-lobbying/helpful-resources/measure-contributions/2026-ballot-measure-contribution-totals/proposition-37-creates-loan-program-middle-income-buyers-qualified-new-homes-initiative-statute