A California loan program for first time homebuyers does not apply only to “illegals”

A new bill would not make a 2023 California program that helps first-time homebuyers with down payments available only to immigrants in the country illegally, as an Instagram post claims. 

"I think it’s kind of cool that California is working on giving first-time home buyers interest free and payment free loans for their home", a man says in a March 5 video. He then says: "A-ha! Psyche motherf—--s, it’s only for illegals." 

He reads from an article shown on screen that’s from BNN News, a website known to spread misinformation and linked to hundreds of X news accounts that were suspended in 2022 for violating spam policies. The BNN News article says California Assembly Bill 1840 would give immigrants in the country illegally interest free loans.

The Instagram poster also says that people who live in California legally don’t get this help: "They are giving it to them instead of Californians." 

This post was flagged as part of Meta’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Meta, which owns Facebook and Instagram.)

The Instagram video misrepresents the proposed legislation about eligibility requirements for California’s "Dream for All" program, which has been in place for a year. The program gives first-time homebuyers interest-free loans for 20% of down payment or closing costs.

The proposed legislation would not give the loans exclusively to immigrants in the country illegally. Californians who meet certain income limits also are eligible for the program.

Assembly Bill 1840, introduced in January, would codify into law that "an applicant under the program shall not be disqualified solely based on the applicant's immigration status." 

Eric Johnson, a California Housing Finance Agency spokesperson, said people who have Deferred Action for Childhood Arrivals status, also called DACA, already are eligible to apply for "Dream for All" loans. DACA protects people who arrived in the U.S. illegally when they were children from deportation and allows them to apply for work permits. 

Jacob Moss, the legislative director for Assemblymember Joaquin Arambula, who introduced Assembly Bill 1840, said the legislation is necessary because federal law says a state must enact a law so that the immigrants in the country illegally can receive state public benefits. Otherwise federal regulations will not allow lenders to give them loans. Moss said the bill would apply only to immigrants in the country illegally who have Social Security numbers or Individual Taxpayer Identification Numbers — which can include DACA recipients. 

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So Assembly Bill 1840 would make it official that a group of people that already is eligible to receive the loans under the program’s rules also would be eligible under state and federal law. 

"It’s a complicated issue area, so we’re trying to bring some clarification to it," Moss said.

The "Dream for All" loan is repaid if or when the homeowners sell their home. Although there is no interest charged on the loan, the homebuyers program participants have to pay back 20% of any appreciation on a home’s value, according to information on California Housing Finance Agency’s website. 

Existing loan eligibility for the loans is for first-time home buyers who do not exceed specified income limits that vary by county. The loans are given to applicants who are chosen randomly from a lottery. The new bill does not change how the loans are distributed. 

Assembly Bill 1840 has been referred to the Committee on Housing and Community Development to be reviewed. 

An Instagram video says that only immigrants in the country illegally are eligible for an interest-free California housing loan program.

Proposed California legislation would codify into law that certain immigrants in the country illegally are eligible for the state’s "Dream For All" loan program. 

Immigrants with DACA status are already eligible to apply for the program. But federal law says a state must enact a law so that the immigrants in the country illegally can receive state public benefits. Otherwise federal regulations will not allow lenders to give them loans.

The proposed legislation would not give the loans exclusively to immigrants in the country illegally. Californians who meet certain income limits also are eligible for the program.

We rate the claim False.