New Home Deposit Reform

AB 1406 will give more Californians a pathway to affordable homeownership by allowing them to make deposits to reserve homes in new housing developments. By providing a new source of low-cost capital from homebuyers, the bill will also help builders lower their construction and financing costs.

The bill increases outdated limits on homebuyer deposits from 3 percent to 10 percent of the expected final purchase price. This change aligns California with states that have already expanded their deposit limits, including New York, Hawaii, Colorado, and Nevada. Higher deposit limits give builders access to a substantial new source of construction funding at a much lower cost of capital. These savings can be passed on to homebuyers at the time of purchase.

Updates

  • AB 1406 was amended in the Assembly on January 5, 2026.

Authors

  • Chris Ward (AD 78)

Sponsors

  • California YIMBY
  • SPUR

Resources