SACRAMENTO, Calif. — Gov. Gavin Newsom will soon determine if undocumented immigrants in California can qualify for a popular state-backed home loan program.

The Democrat-supermajority Legislature passed the contentious measure, Assembly Bill 1840, on Wednesday afternoon. The bill now heads to the desk of Newsom, who will have to weigh the political risk of signing a bill associated with immigration policies during an election year.

The program — California Dream for All — began last year with the intention of helping address the state’s ethnic and racial wealth gap. Roughly $550 million has been allocated in its two year existence, but the future of the program is unclear.

Funding was fully exhausted earlier this year, said California Housing Finance Agency spokesperson Eric Johnson. The Legislature and governor would need to appropriate future funding for the program to continue.

Even if Newsom signs the bill and the Legislature provides more funding, undocumented immigrants would likely still face challenges accessing the program.

“We do have a pretty lengthy waitlist,” Johnson said.

Under AB 1850, undocumented immigrants, who have been purchasing homes for years, would become eligible for this highly sought after program.

The home loan program uses a “shared appreciation” lending model and provides homebuyers with money toward a down payment — 20% of the home’s purchase price or up to $150,000. Homeowners are required to repay the loan and a share of the appreciation value whenever it sells again.

Supporters of the bill, including bill author Assemblymember Joaquin Arambula, D-Fresno, maintain the legislation should not be conflated with broader immigration issues and merely expands eligibility. Participants must meet specific requirements, including income thresholds, minimum credit scores and certain debt-to-income ratios.

“This has been an interesting debate where Fox News anti-immigration propaganda collides with housing policy,” said Sen. Scott Wiener, D-San Francisco, during Tuesday’s Senate discussion of the legislation.

Lenders have worked with undocumented homebuyers for decades as the U.S. does not restrict foreigners from buying real estate. Around 22% of the undocumented population in California, or 604,000 people, owned homes in 2019, according to the Migration Policy Institute.

In recent weeks, the bill has sparked national controversy with critics using it to further blast California’s immigration policies.

Senate Minority Leader Brian Jones, a Republican from San Diego, appeared on FOX Business last week to share his concerns about the bill. On Monday, Elon Musk criticized the measure on X while referencing the state’s Medi-Cal expansion for undocumented residents.

“Seems like half of Earth should move to California, given all the incentives to do so,” wrote Musk.

On Tuesday, Republican lawmakers in the Senate continued their opposition of the bill. Their arguments ranged from highlighting the state budget deficit to saying noncitizens should not be eligible for state programs and calling such legislation “unfair” to veterans.

“I do not support that in any way, shape or form, especially when there are so many Americans standing in line waiting for a housing opportunity to open up,” said Sen. Shannon Grove, R-Bakersfield.

The debate continued into Wednesday before its final Assembly vote.

Republicans reinforced the state’s already large housing shortage and fear that this bill would attract more undocumented residents, while Democrats reemphasized that the legislation solely opens eligibility.

It is unclear how many undocumented immigrants would qualify for the program’s multiple requirements, but the population makes up about 6% of the state’s residents.

“This is not a bill about immigration,” Arambula said. “This is not a bill about the housing crisis. We all know that no single bill can solve those areas. This is a bill about fairness.”

The program has been in high demand since applications opened. Last year, the program’s $300 million in loans were claimed in just 11 days.

CalHFA has since replaced its first-come, first-served model with a lottery system and added a new rule that requires at least one borrower to be a first-generation homebuyer — meaning neither the individual nor their parents could have owned a home.

“All this does is provide an opportunity for you to get in line if you can afford to buy a house,” said Sen. Anna Caballero, D-Merced, on Tuesday.

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