Prop. 37 offers $25 billion to homebuyers to help with a down payment. Here's the catch

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Set us as preferred Buying a home in California requires a colossal amount of money — and coming up with a 20% cash down payment of $180,000 for a median price home is a staggering hurdle for many would-be buyers.That down payment amount is based on the statewide median $900,000 price tag for a house, according to recent data from the California Assn.of Realtors.

In Los Angeles County, the median price for a single-family home is $935,000.In Orange County, it’s $1.5 million.Proposition 37 on the Nov.

3 ballot would allow the state to amass a $25 billion down payment assistance program for middle-class households.For perspective on the enormity of the measure before voters, one of the state’s existing down payment programs, California Dream For All, launched several years ago with $500 million, just 2% of the funding involved in Proposition 37.

California The ballot measure would allow qualified prospective homebuyers to borrow up to 17% of the sales price of a new home, contributing 3% of the down payment from their own funds.The program would not be funded by taxpayers, but instead by the interest charged to borrowers on their down payment loans, also referred to as second mortgages.

The measure has garnered widespread support, including from Gov.Gavin Newsom, statewide unions and mayors from Santa Monica to San José.“Prop.

37 is a historic opportunity to expand homeownership opportunities for generations of working families — at zero cost or risk to taxpayers,” Newsom said in a statement.California Home prices in urban Los Angeles are far more expensive than those in the suburbs, despite a shift in homebuyers moving outward from the city, Redfin data show.But Proposition 37 carries a significant caveat: Any home purchased through the program must be new construction, which could limit its potential reach be...