New Home Deposit Reform

AB 1406 will give more Californians a pathway to affordable homeownership by raising current limits on homebuyer deposits in new housing developments. The bill helps builders lower their construction and financing costs by reducing risk to lenders and investors, ultimately leading to lower-cost homes for Californians.

The bill helps builders lower their construction and financing costs by reducing risk to lenders and investors, ultimately leading to lower-cost homes for Californians. 

The bill increases outdated limits on homebuyer deposits from 3 percent to 6 percent of the expected final purchase price. Higher deposit limits reduce project financial risk, giving builders access to construction funding at a lower cost of capital. These savings can be passed on to homebuyers at the time of purchase.

Updates

Feb 21, 2025 Introduced
Apr 21, 2025 Became a two-year bill
Jan 5, 2026 Amended in Assembly
Jan 13, 2026 Passed Assembly Judiciary Committee
Jan 29, 2026 Passed Assembly 41–14 · Now in Senate

Authors

  • Chris Ward (AD 78)
  • Buffy Wicks (AD 14)
  • Lori Wilson (AD 11)

Sponsors

  • California YIMBY
  • SPUR

Resources

AB 1406 Fact Sheet

A closer look at the bill’s details.

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