Election 2026 · State of California
Proposition 37: State loans for middle-income buyers of new homes
Proposition 37 would let the California Housing Finance Agency sell up to $25 billion in revenue bonds to fund a new down payment loan program. Loans could cover up to 17% of the price of a newly built home, and buyers would put down at least 3%. Buyers must live in the home, be state residents and earn no more than twice their area's typical income. Homeowners' loan payments, not the state, would repay the bonds.
Summary by CityHallPass, not the official text or legal advice. The official text controls: California Official Voter Information Guide: Proposition 37.
At a glance
| Proposition 37 | |
|---|---|
| Bond limit | $25 billion in revenue bonds, repaid by borrowers |
| Loan size | Up to 17% of the price; buyer puts down at least 3% |
| Top price in LA County | About $1.56 million in 2026 (our calculation from federal loan limits) |
| Who can borrow | One-year state residents, living in the home, earning up to 200% of area median income; first-time buyers not required |
| Cost to taxpayers | No direct state or local cost (Legislative Analyst) |
| Money raised, through Sept. 29, 2026 | For: $22.6 million. Against: no committee |
| Largest donors | California Association of Realtors committees, $14.85 million; Building a Better California, $6 million |
| Latest public poll | PPIC, Sept. 4-10: 61% yes |
What does a yes vote on Proposition 37 mean?
The state would create a new homebuying assistance program. The state could sell up to $25 billion in revenue bonds to fund the program. Bonds would be paid back by homeowners' payments on their home loans.
What does a no vote on Proposition 37 mean?
The state would not be required to create a new homebuying assistance program.
What would Proposition 37 cost?
The Legislative Analyst says there would be no direct state or local costs, because homebuyers' payments would repay the bond investors. How big the program gets depends on investor demand, how the loans compare with other options and whether it leads to more building and buying.
What it means for the City of LA
Homes in Los Angeles County would qualify up to a price of about $1.56 million, 125% of the county's 2026 federal conforming loan limit of $1,249,125 (our calculation). Only newly built or newly converted homes sold to their first buyer qualify. The City's own down payment programs serve first-time buyers and lower incomes; Prop. 37 would reach households earning up to twice the area median income. The Legislative Analyst finds no direct cost to the City or any local government.
The details
| Official title | Creates Loan Program for Middle-Income Buyers of Qualified New Homes. Initiative Statute. |
|---|---|
| Type | Initiative statute, placed on the ballot by petition signatures |
| Votes needed to pass | Simple majority (more than 50% yes) of votes cast statewide |
The question on your ballot
Authorizes $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of purchase price of a newly constructed home priced below about $1.5 million. Borrowers must be California residents, occupy the home, meet income limits, and pay at least 3% down. Bonds repaid by mortgage payments, not State. Fiscal Impact: No direct state or local costs. Supporters: United Nurses Associations of California; California Conference of Carpenters; California State Treasurer Fiona Ma Opponents: None submitted
What would change
| Today | If Proposition 37 passes | |
|---|---|---|
| State down payment help | The California Housing Finance Agency (CalHFA) runs a few down payment loan programs for low- and moderate-income buyers (Legislative Analyst). Its Dream For All program lent up to $150,000 or 20% of the price to first-time buyers, with about $150 million to $200 million for its 2026 round and 14,000 applicants, the Orange County Register reported (OC Register) | A new “middle-class home ownership loan” funded by up to $25 billion in CalHFA revenue bonds (Legislative Analyst; text, Sec. 51515.06) |
| Loan terms | Not applicable | A fixed-rate second mortgage for up to 17% of the price, behind the buyer’s first mortgage. The buyer puts at least 3% down from their own money. CalHFA sets the rate and terms at levels that repay the bonds and costs (text, Sec. 51515.05(b)-(c); Sec. 51515.04) |
| Who can borrow | Not applicable | California residents of at least one year who live in the home and earn no more than 200% of area median income for their family size. There is no first-time-buyer rule (text, Sec. 51515.01(a)) |
| Which homes | Not applicable | New homes, townhomes, condos or manufactured homes, or units converted from nonresidential buildings, sold to their first buyer. The price may not exceed 125% of the county’s federal conforming loan limit (text, Sec. 51515.01(b)) |
| Lender fees | Not applicable | Origination fee capped at 0.5% or $290, whichever is greater. No prepayment penalty. Borrowers can ask to defer interest in a hardship (text, Sec. 51515.04) |
| Construction defect claims | State law sets building standards and a process homeowners must follow before suing a builder (Legislative Analyst) | Builders who opt into a “qualified builder option” accept labor standards and liability for subcontractors’ wage violations. In return, their homes get different defect rules: builders may deal directly with owners, get releases after repairs and seek dismissal if owners stall for 120 days. Attorney contingency fees in defect cases over any qualifying home are capped at 30% unless a court allows more (text, Secs. 51515.02 and 51515.04(e)) |
| Oversight | Not applicable | An independent annual audit of the program (text, Sec. 51515.05(g)) |
| Changes later | Not applicable | The Legislature may amend the act by more than a 60% vote of each house if the change furthers its purposes (text, Sec. 3) |
Each bond must state that it is not a debt of the State of California and is payable only from program funds (text, Sec. 51515.06(b)). The measure does not set an interest rate for borrowers.
What it would mean in the City of Los Angeles
- Price limit. The 2026 federal conforming loan limit for a one-unit home in Los Angeles County is $1,249,125 (FHFA). At 125% of that, a qualifying home could cost up to about $1,561,406, and a 17% loan on a home at that price would be about $265,439 (our calculations). The limit changes each year with the federal figure (text, Sec. 51515.01(b)(2)).
- New homes only. Resales do not qualify. Only new construction and conversions of nonresidential buildings sold to their first buyer do (text).
- Compared with City programs. The City’s Moderate Income Purchase Assistance program lends up to $115,000 to first-time buyers, requires 1% down and a 660 credit score, and takes a share of the home’s appreciation (LA Housing Department). The Measure ULA-funded Homeownership Opportunities Program is limited to households at or below 80% of area median income (LA Housing Department). Prop. 37 would reach households up to 200% of area median income and would not require a first purchase (text, Sec. 51515.01(a)).
- Cost. The Legislative Analyst finds no direct state or local cost (analysis).
- Signatures. Los Angeles County supplied 253,493 of the 918,358 raw petition signatures, about 28% (our calculation from the Secretary of State random sample count).
We found no City of Los Angeles analysis or position on the measure as of Sept. 30, 2026.
How it got on the ballot
- Oct. 21, 2025: The Attorney General issued the petition’s title and summary. The proponent is Robert M. Hertzberg (Secretary of State, eligible measures), whom the Mercury News describes as a former Los Angeles assemblymember (Mercury News).
- Nov. 18, 2025: The campaign reported 25% of the signatures needed (Secretary of State, eligible measures).
- Feb.-March 2026: Petitions with 918,358 raw signatures were filed with the counties (random sample count).
- April 21, 2026: The random sample projected 715,233 valid signatures, more than 110% of the 546,651 needed, and the measure became eligible (random sample count; Secretary of State, eligible measures).
Vote needed. A majority of votes cast statewide (Cal. Const., Art. II, Sec. 10).
Related measure. Proposition 1 on the same ballot is an $11.25 billion general obligation housing bond, repaid from the state General Fund, that includes about $1 billion for homebuyer assistance, the Mercury News reported (Mercury News). Prop. 37’s conflict clause covers only another measure that authorizes revenue bonds for middle-class housing loans (text, Sec. 6). See our Proposition 1 page.
What each side says
In the state voter guide. The argument in favor was signed by Danny Curtin of the California Conference of Carpenters, Fiona Ma as a board member of CalHFA and David West of the California State Commanders Veterans Council. No argument against was submitted, so there are no rebuttals (arguments). The argument says:
- Down payments: with a statewide median home price above $930,000, a 20% down payment can mean saving “over $186,000.”
- Cost: “ZERO COST TO TAXPAYERS,” because private bond investors fund the loans and borrowers repay them.
- Construction: helping buyers of new homes “will help accelerate construction.”
- Consumer terms: “below-market, fixed-rate loans,” limits on lender fees and no prepayment penalty.
Arguments are the opinions of their authors and have not been checked for accuracy by any official agency (arguments).
Outside the guide.
- Hertzberg said the goal is “to create generational wealth” and to help renters become owners. Proponents say it would lead to more than 190,000 new homes (Mercury News).
- The League of Women Voters of California opposes it, faulting the lack of clarity on rates and the absence of a first-time-buyer priority: “Prop. 37 does not meet that test” (Mercury News).
- KQED’s guide quotes the No argument that it “makes the state of California one of the biggest mortgage lenders in America overnight” and that “taxpayers are left holding the bag,” and lists Assemblymember Carl DeMaio in opposition (KQED).
- David Garcia of UC Berkeley’s Terner Center, which takes no positions, said it could help residents who qualify for a mortgage but lack savings, while “creating demand for builders to build new housing” (Mercury News).
Checking the main factual claims against official records.
| Claim | Who makes it | What official records show |
|---|---|---|
| Zero cost to taxpayers | Yes campaign | The Legislative Analyst finds no direct state or local cost (analysis). The bonds must state they are not a state debt (text, Sec. 51515.06(b)) |
| Below-market, fixed-rate loans | Yes campaign | The loans must be fixed-rate (text, Sec. 51515.04(a)). The text tells CalHFA to set rates “practical and favorable to applicants” while covering bond costs, but sets no rate (text, Sec. 51515.05(c)). The Legislative Analyst says what the loans would cost buyers compared with other options is unknown (analysis) |
| Will accelerate construction; 190,000 homes | Yes campaign | The Legislative Analyst lists “whether the program results in increased home construction and homebuying” as unknown (analysis) |
| Annual audits | Yes campaign | The text requires an independent annual audit (Sec. 51515.05(g)) |
| Taxpayers are left holding the bag | No side (KQED) | See the first row. The Orange County Register editorial, which opposes the measure, says “taxpayers have no direct risk” and that bond investors bear losses on these second mortgages (OC Register) |
Who supports and opposes it
Supporters
- California Conference of Carpenters, State Treasurer Fiona Ma, the California State Commanders Veterans Council and United Nurses Associations of California (ballot label; argument in favor).
- State Controller Malia Cohen, quoted in the argument in favor, and the California Teachers Association, named there as a supporter (argument in favor).
- California Association of Realtors and the Veterans Affiliated Council; Democratic candidate for governor Xavier Becerra (KQED).
- California Democratic Party, whose executive board endorsed the $25 billion down payment program on Aug. 2 (LA Times).
Opponents
- League of Women Voters of California (Mercury News).
- Assemblymember Carl DeMaio (KQED). His Reform California committee reported $30,000 in independent spending against Prop. 37 (Cal-Access raw data export).
- No opposition committee has registered (Secretary of State totals; Mercury News).
Editorial boards. The Daily News and Orange County Register recommend no (OC Register; Daily News). We found no LA Times editorial board position as of Sept. 30, 2026.
Money for and against
| For Prop. 37 | Against Prop. 37 | |
|---|---|---|
| Committees | Yes on 37, California Homeownership | None registered |
| Raised, Jan. 1, 2025 to Sept. 19, 2026 | $22,556,305.29 | $0 |
| Late contributions, Sept. 20-29 | $55,099.98 | $0 |
| Spent through Sept. 19 | $14,339,596.13 | $0 |
| Cash on hand, Sept. 19 | $8,265,672.98 | $0 |
Source: the committee’s campaign statements and late contribution reports in the Cal-Access raw data export dated Sept. 30, 2026, analyzed by CityHallPass (Cal-Access committee page). The Secretary of State’s totals page showed $12.7 million through Aug. 2.
Who is giving
The Yes committee reported 10 donors (Cal-Access):
| Donor | Amount | Share |
|---|---|---|
| Homeownership for Families, sponsored by the California Association of Realtors | $8,850,000 | 39.1% |
| California Association of Realtors Issues Mobilization PAC | $6,000,000 | 26.5% |
| Building a Better California | $6,000,000 | 26.5% |
| United Brotherhood of Carpenters and two regional carpenters councils | $1,700,000 | 7.5% |
| California Forever (CF) Operations, Inc. | $50,000 | 0.2% |
Source: Cal-Access, from the raw data export, analyzed by CityHallPass. The California Democratic Party also gave $11,405.27 in in-kind help.
Where committee donors get their money. The Realtors’ Homeownership for Families committee received $5 million from the association’s Issues Mobilization PAC and $2 million from the National Association of Realtors in 2026, and held about $16 million in cash in mid-2025 (Cal-Access). Building a Better California is funded by 37 individuals; it also funds the campaigns against Proposition 40 and for Propositions 41 and 42 (Cal-Access; see our Proposition 40 page).
How the money was spent. The committee paid PCI Campaigns $9.17 million for petitions, 64.0% of payments, and Nuckels Media Partners $3.39 million for digital media and literature (Cal-Access).
Outside spending
Reform California, Assemblymember DeMaio’s committee, reported $30,000 in spending opposing Prop. 37. No other independent spending was reported through Sept. 29 (Cal-Access raw data export).
Independent analysis
- Legislative Analyst. No direct state or local costs. The program’s size and effect depend on investor demand for the bonds, how the loans compare with other down payment help, and whether they lead to more building and buying (analysis).
- Orange County Register editorial board. It says below-market rates depend on nonprofits buying the bonds at about 3%, and if that does not happen, market-rate bonds could make the loans cost more than private ones (OC Register).
- Terner Center, UC Berkeley. Policy director David Garcia said it could help buyers who can afford payments but lack savings (Mercury News).
If it passes
- Effective date. An initiative statute takes effect on the fifth day after the Secretary of State files the statement of the vote (Cal. Const., Art. II, Sec. 10(a)).
- Start-up. CalHFA must start the program within one year. Its rules are exempt from the state’s usual rulemaking process (text, Sec. 51515.05(a)).
- Bond sales. CalHFA decides how much to borrow, up to $25 billion, and when and where to market the bonds (Legislative Analyst; text, Sec. 51515.05(f)).
- Legal challenges. We found no announced challenge as of Sept. 30, 2026.
Key moments
The measure has drawn little news coverage beyond voter guides, and we found no debate as of Sept. 30, 2026.
- Building a Better California contribution (Jan. 13, 2026). The group gave the Yes campaign $6 million (Cal-Access; Sacramento Bee via MSN).
Polls
| Pollster | Field dates | Sample | Margin of error | Yes | Source |
|---|---|---|---|---|---|
| Public Policy Institute of California | Sept. 4-10, 2026 | 1,103 likely voters | 3.8 points | 61% | Mercury News |
The published reports did not give the No or undecided shares. We found no other public poll on Prop. 37.