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.


Authors: Scott Wiener (D, SD 11)

Sponsor: California YIMBY