California Veterans Need Help, but Not the $1.1 Billion Designated for Home Loans

Thursday, May 16, 2013

California has about 19,000 homeless veterans, but, for the most part, the list of state services and assistance they could use doesn’t include the $1.1 billion in home loan funding already approved by state voters.

The California Department of Veterans Affairs (CalVet) proudly advertises on its website that, “If you're ready to buy a home, CalVet is here to meet your home financing needs!” And, indeed, it is.

But so are other financial institutions that offer better deals and not many veterans are tapping state resources that have been around a long time. The CalVet home loan program was established in 1921 and California voters have approved 23 veterans’ bonds since 1943 to fund the program, most recently to the tune of $900 million in 2008 via Proposition 12.

However, none of the Prop. 12 money has been tapped and about $230 million from Prop. 32 in 2000 is also untouched. Altogether, around $1.1 billion in bonds sits untouched while veterans go begging for other assistance. Activists have long agitated for more job training, mental health counseling and other services.

More than 420,000 veterans have taken advantage of the program since its inception, but low rates and other market factors have reduced the numbers dramatically. Only 1,300 loans were issued in 2003, a miniscule 83 in 2012 and 59 so far this year. Historically, the program has been self-sufficient and independent from the state General Fund because bond money used for home loans has been repaid by the borrowers.     

Although an uptick in interest rates, which are at historic lows, would probably reignite interest in the loan program, according to CalVet staff members, the Legislature wants to redirect some of the money now to fulfill immediate veterans’ needs.

Assembly Bill 639, introduced by Assembly Speaker John Pérez, would shift $600 million of Prop. 12 money to the Department of Housing and Community Development for construction, rehabilitation and preservation of low-cost multi-family housing for veterans. CalVet would collaborate on the program.

If the Legislature approves the measure, it would go before the voters on the November 2014 ballot. Unlike the home loans, which generally pay for themselves, the redirected money would need a $40 million-a-year contribution from the General Fund.

The bill has the backing of most veterans groups, trade unions and law enforcement, according to Aaron Glantz and the Center for Investigative Reporting.

–Ken Broder  


To Learn More:

Veterans Home-Loan Bond Money Going Untapped (by Chris Megerian, Los Angeles Times)

California Veterans: Homebuying Program Hands out Few Loans (by Aaron Glantz, Center for Investigative Reporting)

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