A controversial bill to help undocumented immigrants in California buy homes was vetoed Friday morning by Gov. Gavin Newsom, citing limitations in the program's existing budget.

House Bill 1840, introduced by the bill's lead author, Rep. Joaquin Arambula (D-Fresno), would have allowed undocumented immigrants to apply along with other qualified applicants for the California Dream for All “shared assessment loan” program, which offers low-income first-time homebuyers interest-free loans of up to $150,000 to cover down payments and fees.

The program initially received $300 million in taxpayer funding to fund about 2,200 loans, according to the California Housing Finance Agency (CalHFA), and the state Legislature then provided an additional $225 million to help about 1,700 additional applicants.

“Given the limited funds available, [the CalHFA] Newsom said any expansion of eligibility for the program must be carefully considered within the broader context of the state's annual budget to effectively manage state resources. Rejection Message.

CalHFA says the program is currently fully funded and is not accepting new applications.

As the bill passed the state Senate and Assembly last month, lawmakers debated whether undocumented people, particularly Mexican immigrants, could participate in the currently unfunded program.

Many Republicans argued the bill would deny opportunity to Americans or encourage illegal immigration into the state.

The California Dream for All Shared Appreciation Loan program was launched last year with the goal of helping low- and moderate-income buyers build generational wealth.

The company offered qualified buyers loans worth up to 20 percent of the purchase price of a home or condo, up to $150,000. These loans accrue no interest and require no monthly payments.

Instead, if the mortgage is refinanced or the home is sold again, the borrower pays back the original loan plus 20% of the home's value that has increased since the borrower purchased the home.

AB 1840 would expand eligibility to include illegal immigrants, but would require them to provide their taxpayer identification number or Social Security number when applying for a loan. The IRS issues a taxpayer identification number. It applies regardless of immigration status, as non-residents may also be required to file tax returns.

Arambula previously told The Times that the current program's eligibility requirements are vague about whether undocumented immigrants are allowed to apply, “even though they meet existing criteria, such as having a qualifying mortgage.”

Without explicit inclusion, undocumented immigrants may be discouraged or denied the opportunity to participate, Arambula said.