AB 946

Saving enough money for a down payment is the largest obstacle to first-time homeownership in California, especially because rentals generally cost more than 30% of a household’s income. Only 30% of Californians can afford to buy a median-priced home, and as a result the state’s homeownership rate is the second-lowest in the nation. Only 34.5% of Black people and 41.9% of Latinos are homeowners.

AB 946 ends an unneeded tax break offering minimal benefits to the 3% of Californians who can afford two homes and instead directs funding to first-time homebuyers. California’s mortgage interest deduction for second homes costs taxpayers approximately $230 million annually. AB 946 will make it possible for approximately 23,000 families to become first-time homebuyers through the California Housing Finance Agency’s MyHome Assistance Program and other homeownership programs:

  • 71% of loans go to people making less than $100,000 annually.
  • 65-70% of CalHFA first-time home loans go to communities of color, helping to reverse historic redlining policies.

AB 946 is a two-year bill and may be heard in January 2022.


Author: Alex Lee (D, AD 25)

Co-Sponsors: California YIMBY, The Greenlining Institute, California Community Builders, Asian Business Association of Silicon Valley, LISC San Diego

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Press Coverage

AB 946 Would Create 23,000 First-Time Homebuyers by Closing Mortgage Interest Deduction Loophole on Second Homes – Yuba Net

No More Second Home Mortgage Interest Deduction – California Globe

Legislature Must Create More Opportunities for Black Homeownership – Los Angeles Sentinel


  • California YIMBY (Co-Sponsor)
  • The Greenlining Institute (Co-Sponsor)
  • California Community Builders (Co-Sponsor)
  • Asian Business Association of Silicon Valley
  • LISC San Diego (Cosponsor)
  • ACCE
  • California Federation of Teachers (CFT)
  • El Concilio of San Mateo
  • The Billups Group
  • Urban League San Diego
  • Richmond Neighborhood Housing Services
  • CA Community Economic Development Association