Second Mortgage Homebuyer Program and Revenue Bond Initiative

Type: Citizen-initiated state statute
Subject: Housing
Election: June 2, 2026 statewide primary

Overview

Establish a second mortgage homebuyer program for qualified homebuyers on qualifying homes and issue $25 billion in bonds to fund the program

Measure Design

See also: Text of measure Click on the following sections for summaries of the different provisions of the ballot measure. [4] Expand All Second mortgage homebuyer program The initiative would establish a second mortgage homebuyer program for qualified homebuyers administered by the California Housing Finance Agency (CalHFA). The criteria for a qualified homebuyer would include: [4] California resident for one year prior to application; agreement to occupy the home as a primary residence within 60 days of closing; income at or below 200% of the area median income for a similar-sized family in the county or city where the qualified new home is located; and down payment of no less than 3% of the purchase price of the qualified home. The initiative would require homebuyers to retain a real estate agent or broker. [4] A qualified home would include newly constructed homes, townhomes, row houses, condominiums, or manufactured homes, or a condominium or other residence in a nonresidential building repurposed for residential use, where the borrower is the first purchaser. The maximum purchase price of a qualified home cannot exceed 125% of the conforming loan limit for a one-unit property in the county in which the qualified new home is located, as determined by the Federal Housing Finance Agency in the annual conforming loan limit report. [4] The initiative would require CalHFA to establish the program within one year of the effective date of the initiative. Effective dates of ballot measures are five days after the secretary of state certifies the election results. [4] The initiative would also require the agency to establish a homeowner education requirement for homebuyers that the agency determines may benefit from it, which can be completed prior to closing. [4] The initiative would also require an annual audit to review whether the bond proceeds are being used for the purposes of the initiative. [4] Lender regulations The initiative would authorize CalHFA to contract with one or more lenders to operate the lending program. It would limit originating fees to not more than 0.5% of the purchase price or $290, whichever is greater. The initiative would prohibit lenders from charging early payment penalties and require the mortgages to be fixed-rate loans. [4] If a buyer’s credit score does not qualify them for the loan program, the initiative requires lenders to review voluntarily submitted financial records, including bank statements, pay stubs, verifiable personal assets, and rental payment history, and evaluate them according to cash flow underwriting in order to qualify the buyer for the program or secure better loan terms. [4] The initiative would authorize the agency to develop underwriting criteria for the loans, including loan limits, minimum credit scores or additional credit verification, and debt-to-income ratios. [4] California Housing Finance Agency revenue bond authorization The initiative would authorize the California Housing Finance Agency (CalHFA) to issue up to $25 billion in bonds to offer second mortgage loans to qualified buyers. This would be in addition to the bonds the agency issues for other housing assistance programs. The initiative would limit second-mortgage loans to 17% of a home’s sales price. Homebuyers would have to secure a first mortgage to cover any remaining costs of the qualified home. The initiative would require CalHFA to set interest and terms on the loans to account for the interest on the bonds and administrative costs of the program by CalHFA. [4] Qualified builder option The initiative would establish a qualified builder option that housing developers may opt into that would require higher labor and enforcement standards, including making the builder liable for labor violations committed by contractors or subcontractors. The option would also subject builders to different construction defect rules. The initiative would require housing developers to certify that participating construction meets the qualifying new home requirements established in the initiative. The agency would confirm builder participation by sending a letter within 30 days of receiving certification that builders can use for marketing, financing, and sales. [4] Under the initiative, a joint labor-management cooperation committee would be able to sue builders for violations of improper worker classification, unemployment insurance taxes and payments, payroll and wage reporting, and employer state registration. [4] Right to repair The initiative would establish right to repair procedures for participants in the loan program buying houses built by qualified builders. Homebuyers would first notify the builder of the nature and location of defects. If a homebuyer fails to do this, a court may grant a builder a stay and require the homebuyer to pay attorney fees if they fail to send the proper pretrial notification within 120 days of the stay. Prior to litigation, builders would be allowed to communicate directly with the homebuyers. Builders would be authorized to secure a release or waiver from the homeowner for the repair work if the homeowner is satisfied with the repairs. [4] Initiative amendment and competing measures The initiative waives the statutory requirement that changes to ballot initiatives must be approved by voters. It would instead allow the legislature to alter the initiative, as long as it maintains the initiative’s intended purposes, via a law passed by 60% of state legislators and signed by the governor. [4] The initiative also contains a competing measures provision that would require this initiative to prevail in its entirety if it is approved and receives more votes than any other competing ballot measure authorizing revenue bonds to fund middle-class housing loans. [4]

Ballot Title

The ballot title is as follows: “ Creates loan program for middle-income buyers of qualified new homes. Initiative statute. [5] ”

Petition Summary

The summary provided for inclusion on signature petition sheets is as follows: “ Authorizes up to $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of the purchase price of a ‘qualified new home’ (new construction or first sale of converted nonresidential property, priced below about $1 million–$1.5 million, depending on county, adjusted annually). Borrowers must be California residents for one year, plan to occupy the home, earn less than 200% of area median income, and pay at least 3% down. Requires that bonds be repaid by homeowners’ mortgage payments, not State. [5] ”

Full Text

The full text of the ballot measure is below: [4]

Support

California Coalition for Homeownership is leading the campaign in support of the initiative. [6]

Supporters

Officials California State Controller Malia Cohen (D) California State Treasurer Fiona Ma (D) Candidates Xavier Becerra (D) - Gubernatorial candidate and former U.S. Secretary of Health and Human Services Matt Mahan (D) - Gubernatorial candidate and Mayor of San Jose Katie Porter (D) - Gubernatorial candidate and former U.S. Representative Tony Thurmond (D) - Gubernatorial candidate and California Superintendent of Public Instruction Antonio Villaraigosa (D) - Gubernatorial candidate Former Officials Former Senate Majority Leader and Assembly Speaker Robert Hertzberg (D) Former Senate President pro Tempore and Sacramento Mayor Darrell Steinberg (D) Unions Northern California Carpenters Regional Council United Brotherhood of Carpenters and Joiners of America Western States Regional Council of Carpenters Organizations California Association of Realtors

Arguments

Former California Senate Majority Leader and Assembly Speaker Robert Hertzberg (D), sponsor of the initiative: “I wanted to create something that would support the building of, and therefore supply, more middle-class housing. We need to increase supply. Because these subsidy programs, most of them, just end up increasing the cost of housing. You wind up buying your grandma’s house with bad pipes and a leaky roof, and then you’re stuck with all those expenses. The subsidies raise prices, but they don’t add supply. And lately, everything has been focused on affordable rental housing. This is about ownership. Because, as I always say, home is where the wealth is.” Tamara Suminski, president of California Association of Realtors: “The Middle-Class Homeownership & Family Home Construction Act addresses California’s housing shortage and affordability crisis, creating pathways to homeownership for first-time home buyers and middle-class families throughout the state.” Pete Rodriguez, second general vice president of the United Brotherhood of Carpenters: “The home affordability crisis has put homeownership out of reach for too many working families. That’s why Union Carpenters strongly support the California Middle-Class Homeownership & Family Home Construction Act. The MCHO ballot measure makes home ownership more affordable with low-interest down payment assistance loans and encourages new home construction, creating good-paying jobs and homeownership opportunities for California’s working families.”

Opposition

Ballotpedia has not located a campaign in opposition to the ballot measure. You can share campaign information or arguments, along with source links for this information, with us at editor@ballotpedia.org .

Campaign Finance

The campaign finance information on this page reflects the most recent scheduled reports that Ballotpedia has processed , which covered through December 31, 2025 . The deadline for the next scheduled reports was April 30, 2026. See also: Campaign finance requirements for California ballot measures CA Homes Committee registered in support of the initiative. It reported over $12.7 million in contributions. [7] Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures Support $12,700,000.00 $0.00 $12,700,000.00 $9,762,449.07 $9,762,449.07 Oppose $0.00 $0.00 $0.00 $0.00 $0.00 Total $12,700,000.00 $0.00 $12,700,000.00 $9,762,449.07 $9,762,449.07

Donors

The following table shows the top donors to the committee registered in support of the ballot measure. [7] Donor Cash Contributions In-Kind Contributions Total Contributions Building a Better California $6,000,000.00 $0.00 $6,000,000.00 Homeownership for Families, sponsored by California Association of Realtors $4,000,000.00 $0.00 $4,000,000.00 California Association of Realtors Issues Mobilization PAC $1,000,000.00 $0.00 $1,000,000.00 United Brotherhood of Carpenters & Joiners of America $750,000.00 $0.00 $750,000.00 Western States Regional Council of Carpenters Issues Committee $450,000.00 $0.00 $450,000.00

Path To The Ballot

See also: Laws governing the initiative process in California An initiated state statute is a citizen-initiated ballot measure that amends state statute. There are 21 states that allow citizens to initiate state statutes, including 14 that provide for direct initiatives and nine (9) that provide for indirect initiatives (two provide for both). An indirect initiated state statute goes to the legislature after a successful signature drive. The legislatures in these states have the option of approving the initiative itself, rather than the initiative appearing on the ballot. In California, the number of signatures required for an initiated state statute is equal to 5% of the votes cast in the last gubernatorial election. A simple majority vote is required for voter approval. The requirements to get initiated state statutes certified for the 2026 ballot: Signatures : 546,651 valid signatures are required. Deadline : The deadline for signature verification is June 25, 2026. However, the secretary of state suggested deadlines for turning in signatures of January 12, 2026, for initiatives needing a full check of signatures and April 17, 2026, for initiatives needing a random sample of signatures verified.

Sources

• Ballotpedia — measure detail page
• Upstream: https://ballotpedia.org/California_Second_Mortgage_Homebuyer_Program_and_Revenue_Bond_Initiative_(2026)