Californians approve $25 billion bond to fund homebuyer down payments

California voters approved Proposition 37 on November 4, 2026, authorizing the state to issue a $25 billion revenue bond. The measure is designed to lend funds to qualified homebuyers to cover a large portion of their down payments. According to the Associated Press, the vote marks the first time California has used this specific type of revenue bond for housing.

The bond would allow the state to borrow from private investors rather than relying on traditional state borrowing mechanisms. Supporters of the proposal, which includes the California Association of Realtors and former Assembly Speaker Bob Hertzberg, argue that the structure protects general taxpayers from debt service costs. Hertzberg stated that wealthy philanthropists and foundations could be persuaded to provide capital at below-market interest rates to make the loans viable for middle-income buyers.

Simultaneously, voters are deciding on Proposition 1, a more conventional $11.25 billion bond measure. As of the latest reports, 58% of counted ballots support the measure, but only 42% of total ballots have been tallied. If certified, this would become the largest housing bond in California history.

Proposition 1 targets low-income renters and the homeless. Nearly two-thirds of the funds would go toward constructing apartment buildings for these groups. The remaining funds would support low-cost home loans for veterans and low-income buyers, as well as housing for farmworkers, students, and tribal members. Advocates note that the state has not issued a major housing bond since 2018, when it borrowed $4 billion.

The urgency for Proposition 1 has increased as funds from the 2018 bond are nearly exhausted. Additionally, a recent redesign of the state's carbon emission market threatens to remove another funding source for affordable housing. Supporters claim the new bond could unlock nearly 40,000 affordable units that are ready for construction but currently lack state financing.

Critics of Proposition 37 have raised questions about whether privately financed downpayment loans will remain affordable for the residents who need them most. Experts note that while the program is untested, most agree it will not increase the tax burden on state residents. The outcome of Proposition 1 will determine whether California proceeds with its largest ever investment in affordable rental construction.