Rep.SaludCarbajal
[This week], U.S. Representative Salud Carbajal (D-CA-24) hosted a press conference in Santa Barbara on the introduction of his American Dream for All Act.
The legislation would help first-time homebuyers purchase homes by creating a federal pilot program that provides down payment assistance loans. The legislation is inspired by the successful California Dream for All Shared Appreciation Loan Program. Carbajal was joined by leaders from the Santa Barbara Association of REALTORS.
“Across the Central Coast and the country, the dream of owning a home is becoming an uphill battle for countless families,” said Rep. Carbajal. “I’m introducing the American Dream for All Act to help make homeownership a reality for first-time homebuyers. My bill will provide the next generation the support they need to overcome the steep cost of a down payment and take their first steps toward achieving the American Dream.”
“For many Americans that rent today, the monthly cost of homeownership is within reach, but the upfront down payment remains the biggest hurdle. This bill will help first-time homebuyers overcome that obstacle and will allow people to achieve the dream of homeownership. The American Dream for All Act is a forward-thinking bill because as a revolving loan it helps potential homeowners achieve their goal, not just today, but for years to come,” said Santa Barbara Association of REALTORS® President-Elect Jennifer Berger. “We are proud to partner with Congressmember Carbajal in making the American Dream a viable reality for all Americans.”
“The National Association of REALTORS® (NAR) strongly supports every effort to make housing more affordable. The America Dream for All Act is a novel approach to easing the financial burden of a downpayment. NAR applauds the leadership of Rep. Carbajal for promoting shared appreciation lending programs to help first-time buyers and for expanding upon the highly popular California Dream for All program. This legislation is complementary to traditional downpayment assistance programs and provides a return to the federal government in the form of a percentage of the home’s appreciation upon sale, making it a win-win for potential buyers, the economy, and the American people,” said Kevin Sears, President of the National Association of Realtors®.
According to the National Association of REALTORS, first-time buyers made up 24 percent of all home buyers, a decrease from 32 percent last year. Seventy-one percent of Younger Millennials, 62 percent of Gen Z, and 36 percent of Older Millennials were first-time homebuyers.
The American Dream for All Act would create a pilot program at the U.S. Department of Housing and Urban Development to provide funding to states, territories, and Tribes to establish a shared appreciation downpayment assistance loan program for first-time and first-generation homebuyers.
Under this plan, the participating housing finance agency (or equivalent agency) would provide eligible borrowers with a downpayment loan to purchase a home. They would be able to provide a borrower a down payment loan up to 20% of the home.
When the borrower sells the home, the borrower is then required to pay back the downpayment as well as a percentage of the appreciation in the home back to the eligible entity to be readministered for future down payment loan assistance for other borrowers. The percentage of appreciation to be paid will match the percentage the borrower received as the downpayment loan for the original cost of the home. (e.g., in exchange for 20% of the downpayment in the form of a silent second, the eligible entity gets 20% of the appreciation; for a 10% downpayment, the Eligible Entity gets 10% of the appreciation, etc.).
An eligible borrower must meet the following criteria:
- (1) is a citizen or permanent resident of US,
- (2) is a first-time homebuyer and/or first-generation homebuyer,
- (3) has completed a buyer education course,
- (4) has a certificate of completion from a housing counseling agency, and
- (5) has an income not more than 150% of area median income (AMI), must self-attest they don’t have the ability to pay more than 5% of total value of home for which the loan under this section is used.
Thank you, Congressman Carbajal!
Ditching Prop. 13 and equalizing property taxes throughout our communities would blow this small program away in a heartbeat by opening up a whole lot of inventory. Clearly, that won’t happen. I have no problem with this unless the Dems decide down the road to go the loan forgiveness route again like they have with student loans. Totally irresponsible.
Prop 13 needs to be expanded to collect the business property taxes that are now exempt.
No, it needs to be REPEALED so all those commercial properties’ owners also need to pay their current fair share. They’re getting ridiculously low property taxes all around here. Level it out.
It’s nonsensical to call that an “expansion”. Business property taxes *aren’t* exempt from Prop 13, which *limits* them. Your “expansion” would *make* them exempt.
But it can’t be done under the CA Constitution. Back in 1978 when Prop 13 was passed, there was another proposition on the ballot that would have amended the Constitution to allow such a “split roll”, but Howard Jarvis and his goons campaigned heavily (and extremely dishonestly) against it. It was just one sentence, and they claimed that it wouldn’t do anything to help homeowners, but in fact it would have enabled legislation that had already been passed but couldn’t go into effect without it.
So it’s either pass such a Constitutional Amendment or scrap Prop 13 entirely. Given how fundamentally unfair it is, the latter is probably preferable.
P.S. Note that Salud’s bill is federal so talking about ditching Prop 13 as blowing his program away is nonsensical as always from that troll.
Hardly. The goal is to facilitate new home buyers, get it? Ditching 13 would be a way bigger move towards that than what Salud’s proposing.
It’s cheaper to rent than buy. Why would the government help people go into debt.
So, first time buyers still have to be making bank, right? I mean, mortgage + insurance + taxes. That’s like 8-10k/month. So if you’re supposed to spend only like 1/3 of your income on housing then how much do you need to be making (don’t forget fed SALT deductions are capped at 10%)? How many first time buyers are making that much? And if they have kids – whoa – those things ain’t cheap. I’m asking, cuz I don’t know. I make a good wage but that would be way out of my range. They’re attacking everything the wrong way. Why are houses/rentals so expensive? Why? I’ll tell you. Yes we’re in a very desirable place to live but that’s only part of the story. The reason is PROFIT. Hedge Funds, Wealthy Folks, Corporations, Foreign Investors, and Foreigners themselves, all with bottomless pockets, buy up everything they can – offering way over market rates. Then they collude (in many different ways) to squeeze out every last dime from people that make a good wage, a wage good enough to pay the rent but not save a dime. So, we should enact laws what limit or outright ban their ownership of homes that families could own.
That is the problem with this program it is a narrow band of people that make enough to make the payment and not too much. Coastal Housing has had a very similar program with limited success. You have to fit in the small box.