On Your November Ballot: Prop 37 Would Assist Middle-Income Californians to Take Out Second Mortgages to Buy New Homes

August 18, 2026

California voters will consider Proposition 37 in November, which would create a second-mortgage assistance program funded by $25 million in bonds to help middle-income residents purchase new homes. Eligible buyers must be California residents for at least one year, earn up to 200% of their area's median income, provide a 3% down payment, and purchase newly constructed or converted residential properties as first-time occupants. The California Housing Finance Agency would administer the program by setting loan terms, contracting with lenders, and ensuring bonds are repaid through interest and administrative fees, with second mortgages capped at 17% of the home's purchase price.

Who is affected

Middle-income California families earning up to 200% of area median income
California residents who have lived in the state for at least one year
Construction workers and carpenters (through potential job creation)
California taxpayers (who would bear risk from bond issuance)
The California Housing Finance Agency (CalHFA)
Contracted mortgage lenders who would operate the program
Home builders and developers of new residential properties

What action is being taken

No actions are currently ongoing. The article describes a proposed ballot measure that voters will decide in November. The only completed action mentioned is that on June 29, Secretary of State Shirley N. Weber assigned the proposition number and announced it had qualified for the November ballot.

Why it matters

This proposition addresses California's home affordability crisis, which has made homeownership increasingly unattainable for middle-income working families. The measure's significance lies in its dual approach: it aims to both increase housing supply by incentivizing new construction and provide financial assistance to help families achieve homeownership, which proponents view as a critical pathway to wealth building. The program represents a shift in focus toward middle-class homeownership rather than solely affordable rental housing, potentially affecting how California addresses its broader housing shortage. Additionally, concerns about taxpayer risk, income eligibility thresholds, and whether the program truly serves those facing the greatest barriers raise important questions about the most effective use of public resources.

What's next

California voters will decide on Proposition 37 in the November election
If approved, CalHFA would establish lending standards including loan limits, minimum credit scores, and debt-to-income requirements
CalHFA would contract with one or more lenders to operate and support the program
CalHFA would issue up to $25 million in bonds to finance the second mortgages

Read full article from source: The San Diego Voice & Viewpoint