🏠 California lawmakers marketed its new loan program for first-time home buyers as a “Dream For All.” The funds ran out after just 11 days with the average loan hitting $112,000.
The program was meant, in part, to help address California’s ethnic and racial wealth gap, with Black and Latino families having fewer net assets than the national average. Participation in the program was limited to households earning less than 150% of median earnings in their county. According to the initial characteristics shown in the agency document obtained by CalMatters, roughly two-thirds of the beneficiaries went to those making less than $125,000.
The fact that the program ran out of cash in a two week spree speaks to just how voracious demand is for housing in California. It also suggests that some of the people who made use of the program were already well into the house hunting process. California prohibits affirmative action, limiting the housing agency’s ability to direct the money to communities of color.
Eric Johnson, an agency spokesman, confirmed on Monday that the program would be paused until more funding could be allocated. He pointed to the fact that 25% of homeowners in California are of Hispanic or Latino origin, and said the fact that 34% of the loans were made to these groups meant the program was “outperforming in that category.” Asian families make up about 16% and Black families about 4%.
Sacramento County, home to the state capital, received 11% of the program’s funds, despite making up just 4% of the state population. Los Angeles County, in contrast, received 9% of the money, despite being home to a quarter of all Californians. Johnson, of CalHFA, said Sacramento County consistently sees higher participation rates than other counties, and that the overrepresentation of loans from the county “tracks with our other loan programs.
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