CalHome Funding Secured: Why It Matters

CalHome: A Necessary, Smart, and Measurable Solution to California’s Homeownership Crisis

Some of us Californians are among the lucky ones. We remember the pride of turning a key in the front door of our first home. The thrill of rolling on a coat of paint in our favorite color. The peace of mind in knowing where our child would go to school next year and the year after that. The security of a mortgage payment that was an investment in our futures and those of untold generations to follow.

We have an effective, proven, and vital tool to ensure homeownership isn’t just the province of the few: CalHome. This is the single state program that funds the production and preservation of affordable ownership housing. Last year, we won a $100 million commitment to CalHome for this year’s state budget – but as we faced down an extremely tight budget, CalHome sat on the chopping block in January. However, after months of advocacy by Habitat statewide, and hard work by our state legislature, we are thrilled to announce that $50 million has been allocated to CalHome in the state budget.

While $50 million is short of our original ask, it is incredibly significant, particularly in a year of tightening purse strings. It may represent a tiny fraction of our state’s budget, but it will make a world of difference to hundreds of our neighbors.

Why?

Our state sits second from the bottom when it comes to homeownership rates. The lucky ones are growing fewer and wealthier, while the majority of Californians are priced well out of the market. And for those earning under 80% of the median income, it is virtually impossible to purchase a home. When we have a simple, critically needed, and profoundly impactful solution at our disposal, we cannot afford to leave it off the table.

Let’s start with the need for CalHome, and the turnkey readiness to use it. There is no other state funding program that will increase supply of affordable homes for ownership. It is a highly leveraged and efficient funding lifeline to Habitat for Humanity and the many other affordable homebuilders poised to alleviate the critical dearth of supply in our state – and the only state homeownership program that nonprofit developers like Habitat can compete for funding.

And we are ready to leverage CalHome for impact today. As of February 2023, CalHome was more than 100% oversubscribed. Among Habitat for Humanity affiliates alone, we have close to $90M in funding requests, and a ready pipeline of 500 new and rehabilitated homes that would put that funding to work in short order. We have another $30M in funding needs we were unable to apply for due to applicant caps.

Plus, CalHome is an intelligent use of budget. It is cost-effective and efficient. An investment as little as $100K can produce a new, permanent, affordable home. It’s a holistic solution designed to impact communities of every size and type, up and down the state, in a multitude of ways that mean more low- and very low-income Californians in homes they can afford to own. Ultimately, it’s a powerful tool to address the supply crisis and protect homebuyers from the erratic home prices and interest rates that often come with traditional loans.

Most importantly, though, CalHome matters. It can change the trajectory of thousands of lives, and the narrative of housing in our state. These are more than dollars on the line. CalHome is 100% affordable, designed to expand and protect access to homeownership among low- and very low-income Californians. These are families that could build long-term stability and realize profound health benefits that come with it. Children who do not change schools at the whim of the rental market. Neighbors rooted and engaged in their communities. Essential workers able to live securely, in and near the areas they serve. A parent with more time for their family and less time on a lengthy commute. A concrete answer to decades of housing injustice that have left us with a stark racial homeownership gap – an answer that builds a cycle of generational wealth in communities too long barred from the opportunity.

Keeping CalHome in the state budget means putting our dollars where our values lie. We want to live in a state that values equity; CalHome helps level the playing field for a powerful opportunity whose effects ripple out for generations. We want a prosperous and robust California; CalHome invests in homeownership and the economic mobility that comes with it. We value health and education; CalHome bolsters all the well-documented positive outcomes associated with homeownership. We care about our infrastructure and our environment; CalHome equals more affordable ownership opportunities that help our workforce avoid supercommutes on roadways choked with emissions.

It is time to break the cycle of bandages on a ballooning housing crisis, and build a new cycle – one that helps more Californians plant deep roots, set future generations up to build more upon solid foundations, and reap the promise of living in the Golden State. By protecting CalHome – and continuing the work to grow it – we can do just that.