Proposition 37: Creates Loan Program for Middle-Income Buyers of Qualified New Homes

A long California Today explainer by editor Mac Douglass, reflecting data as of October 18, 2026. It covers Proposition 37's text section by section, 2026 price caps and income ceilings by county, a comparison with existing CalHFA programs, the builder option, consumer rules, cost, campaign money, endorsements, editorial positions, and polling.

• Says the 2026 price cap works out to $1,040,938 in 41 baseline counties and $1,561,406 in ten high-cost counties including Los Angeles. Its illustrative income ceiling for a family of four is $216,200 in Los Angeles County.
• Notes the measure does not say which income table CalHFA must use.
• Contrasts Prop 37's monthly-repaid loan with CalHFA's deferred MyHome and Dream For All programs.
• Explains that qualified builders take on the labor provisions of Public Resources Code 21080.66 and liability for subcontractors' violations, in exchange for modified Right to Repair procedures.
• Flags that Sec. 51515.04(g) exempts program loans from Civil Code 2924.13, a 2025 protection for borrowers on dormant second mortgages, and that 'The text does not say why.'
• Reports $30.9 million in support from top contributors per FPPC (Oct. 14): Realtors, Building a Better California (Sergey Brin and John Doerr), carpenters' unions ($1.7 million), California Forever ($50,000). No opposition committee.
• PPIC's September survey: 61% yes, 35% no; Republicans opposed 62% to 35%.
• Editorial boards split two to two: McClatchy and the San Francisco Chronicle recommend yes; the San Diego Union-Tribune and Orange County Register recommend no.

LAist's republication (October 9, 2026, updated October 15) of the CalMatters voter guide entry on Proposition 37. It covers what is at stake, the ballot language, how the program works, supporter and opponent arguments, notable endorsers on each side, and the fiscal impact.

• CalHFA could borrow up to $25 billion, though it would not be required to, to cover part of buyers' down payments on newly built homes and condos.
• Says a coalition of real estate interests and labor unions placed the measure on the ballot.
• Loans of up to 17% would leave a 3% cash down payment, or $24,000 on an $800,000 home; if a buyer defaults, private lenders rather than taxpayers absorb the loss.
• Notable supporters: California Democratic Party, Xavier Becerra, California Association of Realtors, California Conference of Carpenters, SEIU, Sacramento Bee editorial board.
• Notable opponents: Reform California and the League of Women Voters.

The ballot arguments pages for Proposition 37 from the state voter guide: the argument in favor and a page stating that no argument against was submitted. Because no opposing argument was filed, there are no rebuttals.

• Supporters argue the measure creates homeownership opportunities and encourages new construction 'with ZERO COST TO TAXPAYERS.'
• They cite California's 'second-worst homeownership rate in the nation' and say a 20% down payment on a $930,000 median home can require saving over $186,000.
• They say the loans are 'not a handout': buyers must qualify for a mortgage, meet income limits, pay 3% down, occupy the home, and repay.
• They claim consumer protections: below-market fixed-rate loans, fee limits, no prepayment penalty, and annual audits.
• No argument against was submitted.

The Official Title and Summary (Attorney General) and Analysis by the Legislative Analyst for Proposition 37, as printed on pages 40–41 of the state voter guide. It explains revenue versus general obligation bonds, existing CalHFA down payment programs, and construction defect law, then describes the proposal and its fiscal effects.

• The title and summary describes fixed-rate loans up to 17% of a qualified new home's price (new construction or first sale of converted nonresidential property), priced below about $1 million–$1.5 million depending on county.
• Revenue bonds would be repaid by homeowners' payments; CalHFA would decide how much to issue (up to $25 billion) and over what period, and would be required to keep homebuyer interest costs as low as possible.
• All developers could build eligible homes; those choosing the qualified builder option would meet higher labor standards in exchange for different construction-defect rules.
• No direct state or local costs.
• Unknowns: investor demand, loan cost compared with other down payment options, and whether construction and homebuying increase.

The Proposition 37 section (pages 40–43) of the Secretary of State's printed Official Voter Information Guide. It combines the Attorney General's official title and summary, the Legislative Analyst's analysis, the argument in favor, and the page stating no argument against was submitted. Despite its URL, it does not include the measure's legal text, which the guide places on page 118.

• The Attorney General's summary describes fixed-rate loans of up to 17% of a 'qualified new home' priced below about $1 million–$1.5 million depending on county, for one-year residents earning less than twice area median income who pay at least 3% down.
• The Legislative Analyst estimates no direct state or local costs because homebuyer payments repay bond investors.
• The LAO lists three unknowns: investor demand for the bonds, loan cost compared with other assistance, and whether the program increases construction and homebuying.
• The LAO describes the qualified builder option as higher labor standards in exchange for construction-defect rules that 'generally aim to provide more flexibility to developers.'
• The argument in favor is signed by Danny Curtin (California Conference of Carpenters), Fiona Ma (CalHFA board member), and David West (California State Commanders Veterans Council).
• No argument against Proposition 37 was submitted.

The Legislative Analyst's Office stand-alone analysis of Proposition 37 for the November 3, 2026 ballot. Its text matches the analysis printed in the voter guide, and it adds the yes/no statement and ballot-label fiscal line.

• CalHFA could sell up to $25 billion in revenue bonds to fund 'middle-class homeownership loans' covering up to 17% of the home price, with at least 3% from the buyer.
• Loan payments would be designed to repay the bonds and cover administrative costs; CalHFA decides the amount and timing of issuance.
• Applicants must be state residents with household income no more than double the typical local income; the buyer must be the home's first purchaser and the price is capped.
• Qualified builder option: higher labor standards in exchange for different construction-defect rules.
• No direct state or local costs; scope depends on investor demand, relative loan cost, and effects on construction and homebuying.

The October 6, 2025 fiscal-impact letter from the Legislative Analyst and the Director of Finance to Attorney General Rob Bonta on A.G. File No. 25-0013, Amendment #1, prepared for the initiative's title and summary. It describes the program in more detail than the ballot analysis.

• The $25 billion is in addition to the revenue bonds CalHFA already issues for other programs.
• Applicants would not need to be first-time homebuyers; CalHFA may adopt other qualifications such as minimum credit score and maximum debt level.
• The 2025 price cap is roughly $1 million to $1.5 million depending on county, adjusted using a federal methodology.
• The measure does not limit which developers may build eligible homes; optional qualified builders face higher labor and liability enforcement and more flexible construction-defect rules.
• Under current law a builder cannot require a release or waiver from a homeowner in exchange for repairs; the letter notes this in background.
• No direct state or local costs; scope depends on investor demand, loan terms compared with other programs, and effects on construction.

The California Secretary of State's official online voter guide page for Proposition 37. It gives the ballot label summary, the fiscal impact line, listed supporters and opponents, the 'what your vote means' statements, and one-paragraph excerpts of the ballot arguments. No argument against the measure was submitted.

• Ballot summary: authorizes $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of the 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 are repaid by mortgage payments, not the State.
• Fiscal impact: no direct state or local costs.
• Listed supporters: United Nurses Associations of California, California Conference of Carpenters, State Treasurer Fiona Ma. Listed opponents: none submitted.
• No argument against Proposition 37 was submitted.

The official text of Proposition 37. It adds Health and Safety Code Chapter 11.5, directing the California Housing Finance Agency (CalHFA) to issue up to $25 billion in revenue bonds and make subordinate 'middle-class home ownership loans' covering up to 17% of the price of a newly built home. It also creates a voluntary 'qualified builder option' that pairs labor standards with modified construction-defect procedures, caps homeowners' attorney contingency fees in defect suits at 30%, and leaves most loan terms to CalHFA rules.

• Borrowers: California resident for one year, income up to 200% of area median, move in within 60 days, at least 3% down from non-grant, non-borrowed funds; no first-time-buyer requirement.
• Homes: newly built or converted units bought by the first purchaser, priced up to 125% of the county conforming loan limit; not 'public works' under the Labor Code.
• Loans: subordinate second mortgages, fixed-rate, no prepayment penalty, origination fee up to the greater of 0.5% or $290; hardship deferral of interest; Civil Code 2924.13 does not apply.
• CalHFA sets interest rates, terms, residency duration, and underwriting, by board-approved rules exempt from the Government Code rulemaking chapter; program must start within one year.
• Qualified builder option: opted-in builders take on selected Public Resources Code 21080.66 labor provisions, enforceable by joint labor-management cooperation committees, and get modified right-to-repair procedures (signed itemized notices, direct contact with claimants, post-repair releases, dismissal motions).
• 30% cap on attorney contingency fees in defect actions 'related to a qualified new home', unless a court approves more.
• Applicants must retain a licensed real estate agent or broker.
• Bonds are payable solely from program funds, not the state's faith and credit; annual independent audit.
• Amendment needs a 60%-plus legislative vote and must further the act's purposes; severability, liberal-construction, and conflicting-measure clauses.

An October 7, 2026 Public Policy Institute of California blog post by Eric McGhee estimating how many Californians could realistically use Proposition 37's down payment assistance. Using 2024 Census data, it finds eligibility is broad but affordability at current interest rates limits the program's reach.

• 91% of renters in 2024 would have met the 200% AMI income test (up to $373,000 for a family of four in some places).
• The price cap would have covered homes up to $1.15 million in 2024.
• At 7% rates and a 36% debt-to-income limit, even an entry-level new home was out of reach for 56% of renters.
• 71% of renters without a high school diploma and three quarters of Black renters could not both qualify and afford an entry-level home; 39% of Latino renters cleared the bar.
• $25 billion could reach about 113,000 buyers at the maximum price and full 17%, or about 560,000 at the full 17% on entry-level homes (called a reasonable central estimate).
• The 560,000 figure would close about 41% of the 1.35-million-household gap with other states' ownership rate.
• Success depends on builders expanding inventory, because the money must go to new homes.

GrowSF's San Francisco voter guide entry recommending Yes on Proposition 37 (last updated September 10, 2026). It explains the loan program and focuses on the measure's construction-defect provisions, which it argues could help restart condo construction.

• GrowSF recommends Yes on Proposition 37.
• Says the revenue bonds are not backed by the General Fund; bondholders, not taxpayers, carry default risk.
• Says builders can currently be sued for defects for 10 years after construction, which researchers (Terner Center, SPUR) link to low condo construction (3% of new multifamily housing, 2011–2021).
• Describes the opt-in builder track: itemized defect notices, direct builder-homeowner communication, signed releases after repairs, and a 30% contingency-fee cap; builders selling more than 25% above the price cap lose these reforms for that home.
• Notes AB 1903 passed the Assembly 68–0 and cleared the Senate but died before a final vote.
• Acknowledges the LAO cannot say whether the measure will spur construction.

The League of Women Voters of California's 2026 ballot recommendations document. It recommends a No vote on Proposition 37; the Prop 37 entry is a short statement of reasons. Other measures are covered in the same document but are not summarized here.

• LWVC position on Prop 37: OPPOSE ('Vote NO on Proposition 37').
• Says Prop 37 addresses a real barrier, the down payment, but by adding a second mortgage generally repaid monthly.
• Argues it could help a family buy a home without making it affordable to keep, and that voters would not know the rate, term, or payment before approving it.
• Argues it could reinforce racial and economic gaps: no priority for first-time or first-generation buyers, and some households over $300,000 could qualify.
• Argues it is not tied to good planning, with no requirement that homes be near jobs, transit, schools, or services.
• Cites the Legislative Analyst's uncertainties about investor demand, loan cost, and construction effects.
• The League supports Prop 1 as its preferred housing measure on the same ballot.

An August 2026 report by the California Budget & Policy Center (Monica Davalos, Nishi Nair, Kristin Schumacher) examining whether Proposition 37 would make homeownership more affordable. It concludes that the outcome is 'not guaranteed' and raises concerns about monthly repayment costs, who could use the program, sprawl, and new-home carrying costs. The Center states it does not endorse or oppose ballot measures.

• Unlike CalHFA's MyHome and Dream for All deferred 'silent second' loans, Prop. 37 loans are likely to require monthly payments, because the bonds must be repaid from loan revenue.
• Second-mortgage interest rates are not guaranteed to be below market and could exceed roughly 6.5% first-mortgage rates; the rate cannot be known before the vote.
• Income eligibility up to 200% AMI ranges, for a family of four, from $166,800 (Madera) to $375,800 (Santa Clara) in the Center's analysis.
• The 3% down payment ($15,000 on $500,000; $21,000 on $700,000) could exhaust typical savings, which may skew benefits toward higher-income eligible families.
• No first-time or first-generation buyer requirement and no shared-equity repayment.
• Restricting aid to new construction could push demand to suburban and exurban land and bring HOA dues, Mello-Roos taxes, and wildfire-insurance costs.
• Because revenue bonds need no voter approval, the program could have been enacted legislatively.

The Hoover Institution's 'California Decides' Proposition Lab explainer on Proposition 37. It covers quick facts, the legal language with section citations, trade-offs, potential risks and benefits, and open questions. It says it aims to inform rather than tell voters what to think.

• Describes the measure as an initiated statute adding a Health and Safety Code chapter; the Legislature may amend only by more than 60% of each house and only consistent with its purposes.
• Sponsor: Robert M. Hertzberg through the California Homes Coalition, with California Association of Realtors support; qualified with over 600,000 valid signatures.
• Says the 'no cost to taxpayers' claim holds only if the loan pool performs; losses legally fall on bondholders, but political pressure for a state rescue is a contingent risk.
• Says that if supply does not respond, demand subsidies may be capitalized into higher new-home prices and benefit sellers and builders.
• Below-market rates depend on investor appetite, which the LAO treats as unknown; the 200% AMI ceiling reaches some relatively high earners.
• Notes the agency's rules are exempt from the Administrative Procedure Act.
• Lists benefits: no General Fund debt service, a supply-oriented design, a lower down payment barrier, consumer protections, and Community Reinvestment Act eligibility.

A July 31, 2026 campaign release from gubernatorial candidate Xavier Becerra announcing his positions on six statewide November measures, including 'YES on Prop 37: Second Mortgage Homebuyer Program and Revenue Bond Initiative.' It gives no reasoning specific to Prop 37.

• Becerra endorses Yes on Prop 37.
• His general statement cites 'housing that people can afford' among the ballot's positives, without discussing Prop 37 specifically.

A one-page list of the California Teachers Association's positions on November 2026 initiatives. It lists 'Proposition 37 – Homeownership Loan Program Act' as Support, with no stated reasoning.

• CTA position on Proposition 37: Support.
• The document gives no rationale for any position.

An April 29, 2026 news release from the San Diego Association of REALTORS® announcing its support for the California Middle-Class Homeownership and Family Home Construction Act of 2026, which later became Proposition 37. It was issued during C.A.R. Legislative Days in Sacramento, before the measure had a proposition number.

• SDAR supports the initiative as a way to expand homeownership for working Californians.
• Describes up to $25 billion in revenue bonds 'not funded by taxpayer dollars' providing a second mortgage of up to 17% of price.
• Says it creates a path to 20% equity at purchase, eliminating private mortgage insurance.
• Says repayment comes from homeowner mortgage payments, not the state's General Fund.

The Secretary of State's campaign contribution totals page for Proposition 37. It lists two support committees with about $33.6 million in combined reported contributions through October 22, 2026, and no opposition committees.

• Total reported support contributions: $33,631,777 through 10/22/2026.
• Homeownership for Families, Sponsored by California Association of Realtors – Yes on 37 (ID 1400190): $18,374,184.
• Yes on 37, California Homeownership (ID 1481256): $15,257,593.
• No opposition committees identified as of 10/22/2026.

A CalMatters explainer by housing reporter Ben Christopher, in question-and-answer form, on how Proposition 37 would work and the main open questions. It presents views from proponent Bob Hertzberg, the League of Women Voters of California, an American Enterprise Institute housing expert, the Legislative Analyst's Office, PPIC, and the California Budget & Policy Center.

• CalHFA would sell bonds to private investors and re-lend the money as second mortgages; per the measure's text, bondholders rather than taxpayers bear default losses, though the article notes some analysts doubt lawmakers could resist pressure for a bailout.
• Loans could cover up to 17% of a home's value, reducing the cash needed on an $800,000 home from $160,000 to $24,000.
• Income eligibility (up to double county median income) ranges from about $116,000 in Imperial to just over $410,000 in San Mateo for a family of three, covering roughly 90% of renters per PPIC.
• Only new or newly converted homes qualify; the stated rationale is to match new demand with new supply.
• A Yes on 37-commissioned analysis projects up to 190,000 homes; its author concedes that is the high end.
• Second-mortgage bonds are riskier for investors, which could mean high rates; PPIC found under 40% of eligible renters could afford the added payments on an entry-level home.
• The story was corrected to say loans can be used on any home under the price cap, not only homes from qualified builders.

An October 16, 2026 NBC Bay Area report by Nathalie Vera on Proposition 37. It explains the down payment program and quotes a realtor-association representative, a political analyst, and an opponent, Assemblymember Carl DeMaio.

• Describes a $25 billion fund raised through revenue bonds, applying only to new homes.
• Eligibility: one year of California residency, living in the home, and income under 200% of area median income.
• Critics say it does not address the lack of affordable housing and could drive up prices.
• Political analyst Guy Marzorati says the measure was placed on the ballot by former state Sen. Bob Hertzberg, a Democrat, and that opponents have included many Republicans and conservative groups.

KPBS's republication (October 2, 2026, updated October 20) of the CalMatters voter guide entry for Proposition 37. It covers what the measure does, supporter and opponent arguments and endorsers, and the ballot text.

• CalHFA would be able, but not required, to borrow up to $25 billion for loans of up to 17% of a new home's price.
• Anyone earning up to twice area median income would be eligible; private lenders, not taxpayers, would bear defaults.
• Placed on the ballot by a coalition of real estate interests and labor unions.
• Supporter endorsements: California Democratic Party, Xavier Becerra, California Association of Realtors, California Conference of Carpenters.
• Opponent endorsements: Reform California, League of Women Voters.

An October 1, 2026 KQED 'PropFest' podcast episode with transcript, in which housing reporter Adhiti Bandlamudi explains Proposition 37 to hosts Olivia Allen-Price and Ericka Cruz Guevarra. It includes clips from proponent Bob Hertzberg and opponent Assemblymember Carl DeMaio.

• Describes the measure as doing two things: helping middle-income buyers and jump-starting home construction, because it applies only to newly built homes.
• The 3% buyer down payment plus 17% state loan reaches the 20% that avoids mortgage insurance; the loan is repaid with interest alongside the mortgage.
• No first-time or first-generation buyer requirement and no equity sharing with the state.
• Lists critics' concerns: rates are not guaranteed low, investors may view second mortgages as risky, possible worsening of racial disparities, existing programs, and no guarantee developers will build.
• Supporters had raised $12.7 million as of taping; the opposition had spent nothing.

Long document: only the first 11,962 characters were summarized.

The complete amended text of initiative 25-0013 Amdt. 1, the 'California Middle-Class Homeownership and Family Home Construction Act of 2026', submitted to the Attorney General by proponent Robert M. Hertzberg on September 22, 2025, with his cover letter. This is the measure that appears on the ballot as Proposition 37. It adds Chapter 11.5 (Sections 51515–51515.06) to the Health and Safety Code: a CalHFA-run second-mortgage program funded by up to $25 billion in revenue bonds, borrower and home eligibility rules, a voluntary 'qualified builder option' with labor enforcement and modified construction-defect procedures, consumer-protection rules, and amendment, severability and conflicting-measure clauses.

• CalHFA administers the program and may issue up to $25 billion in revenue bonds (excluding refunding bonds); bonds must state they are not a debt or pledge of the State's faith and credit (Sec. 51515.06).
• Borrowers: one-year California residency, occupancy as primary residence within 60 days, family income not over 200% of area median income, and at least 3% down from a source other than a grant or borrowed money (Sec. 51515.01(a)).
• Qualified new home: newly constructed home or a converted nonresidential unit where the borrower is the first purchaser; price capped at 125% of the county one-unit conforming loan limit (Sec. 51515.01(b)).
• Each loan is a subordinate secondary mortgage financing no more than 17% of the price; CalHFA sets interest rates and payment terms at levels needed 'to the greatest extent possible' to repay the bonds and administrative costs (Sec. 51515.05).
• Qualified builders accept specified labor provisions and liability for subcontractor violations, enforceable by joint labor-management cooperation committees, and receive modified Right to Repair Act procedures, including allowing homeowner releases after repairs (Secs. 51515.02, 51515.04(e)).
• Attorney contingency fees in construction-defect actions on qualified new homes are capped at 30% unless a court approves more (Sec. 51515.04(e)(2)).
• Civil Code section 2924.13 does not apply to program loans; agency rules are exempt from the Administrative Procedure Act (Secs. 51515.04(g), 51515.05(a)).
• The Legislature may amend only by a more-than-60% vote of each house and only consistent with the act's purposes; a competing measure on revenue-bond middle-class housing loans is deemed in conflict (Secs. 3, 6).