Habitat CA Response to CalHome

Habitat for Humanity California Responds to Lack of Funding for the Production of Affordable Ownership Homes in State Budget

CalHome is the only state program that would have addressed the supply side of affordable homes for working families to purchase – critical to solving our state’s housing crisis.

SACRAMENTO, CA — Habitat for Humanity California and its network of community-based Habitat affiliates statewide is expressing deep disappointment in the 2025–26 California State Budget, which fails to include any funding for CalHome – the state’s only program dedicated to supporting the construction and preservation of affordable homes, creating first-time ownership opportunities for families earning lower-incomes.

Despite broad support for the historically successful CalHome Program from Legislators, nonprofit housing developers, and local governments, the 2025 Budget Act allocates $300 million to the Dream for All down payment assistance program while providing zero dollars to CalHome. This decision comes at a time when the need for affordable homeownership supply has never been more urgent.

“The down payment assistance offered by Dream for All may help some buyers, but it largely benefits higher-income households – purchasing market-rate homes with standard interest rates and sales commissions – fueling demand, worsening competition, and inflating home prices,” said Debbie Arakel, Executive Director of Habitat for Humanity California. “Dream for All does nothing to produce new homes, which is the foremost way to reduce home prices and address the root of the housing crisis. CalHome funds directly support the creation of affordable homes for essential workers to purchase – teachers, caregivers, grocery clerks – who are being priced out of their communities. By failing to fund CalHome, California is turning its back on these families.”

CalHome funding is specifically designed to create permanently affordable homes that are sold exclusively to lower-income buyers. It is a cost-effective and proven program that turns public investment into new housing supply. Affordable homes made possible by CalHome are sold at below market interest rates – sometimes even at 0% – and the transactions are typically commission-free, so 100% of public funds invested go toward home production. For less than an average of $100,000 per home, CalHome enables new home construction and rehabilitation projects that deliver affordable homeownership to households earning up to 80% of the Area Median Income. In contrast, Dream for All offers an average of $115,000 in downpayment assistance to higher-income individuals purchasing market-rate homes, with no guarantee that the funds will reach lower-income Californians. The program does not require affordability restrictions or income targeting that would ensure equitable access to homeownership.

“The state has chosen to prioritize a program that will produce zero units over one that delivers permanent, affordable ownership homes,” said Arakel. “This is not just a missed opportunity—it’s a failure to invest in real solutions to the homeownership crisis.”

A recent appeal by Habitat for Humanity California requested that $150 million of the $300 million proposed for Dream for All be reallocated to CalHome so that the two programs could work together – supporting families with down payment assistance and increasing the supply of homes they can afford to purchase – creating a balanced and effective housing solution that protects and expands homeownership opportunities for families.

Habitat California has submitted a new letter to Governor Newsom, Senate President pro Tempore Mike McGuire, and Assembly Speaker Robert Rivas urging them to restore funding to CalHome in future budget actions.

The organization and its advocates remain committed to fighting for equitable homeownership opportunities across the state.