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Firstly, this is just a punt. A temporary bandaid to avoid having to make any actual change. A bandaid on top of multiple decades of bandaids. California will e

Firstly, this is just a punt. A temporary bandaid to avoid having to make any actual change. A bandaid on top of multiple decades of bandaids. California will eventually run out of bandaids and the longer they wait the worse it will be. Secondly, it will be abused as all programs are. We’ll be here 12-18 months after this goes live to lament how rich people abused this program. If you think it won’t happen you’re grossly underestimating the tax planning and scheming skills of wealthy advisors. Finally, this really doesn’t even seem to come close to helping the median earner afford a median house. We’re talking about income limits of around $100k and 7-digit house prices. Free down payment is nice, but what about the monthly payment burden?? My prediction is that a large percentage of people using this program will be rich people with clever accountants.

throwaway0a5e 4y ago
>California will eventually run out of bandaids and the longer they wait the worse it will be. The problem is that by the time that happens the people responsible for this bandaid driven policy will have long since cashed out to Idaho or wherever and not bear the consequences.
prepend 4y ago
It will be worth it for people who have their own corps and can defer income across years. But will be really hard for a “normie” making $100k to afford a $1M home even with this. Or I suppose impossible given that underwriting requirements won’t let their debt/income ration pass on a $900k mortgage. So it may be impossible for an honest person to meet this. Maybe if someone does this right before getting married and then they have a wealthy spouse who can help pay the note. The monthly p&i on a $900k loan is about $5k at 5%/30 years. So a $100k income can’t make that without some additional income sources.
- parkingrift 4y ago
  Ha. Good point. Makes me actually wonder whether this was designed to be abused.

throwaway0a5e 4y ago

>California will eventually run out of bandaids and the longer they wait the worse it will be. The problem is that by the time that happens the people responsible for this bandaid driven policy will have long since cashed out to Idaho or wherever and not bear the consequences.

prepend 4y ago

It will be worth it for people who have their own corps and can defer income across years. But will be really hard for a “normie” making $100k to afford a $1M home even with this. Or I suppose impossible given that underwriting requirements won’t let their debt/income ration pass on a $900k mortgage. So it may be impossible for an honest person to meet this. Maybe if someone does this right before getting married and then they have a wealthy spouse who can help pay the note. The monthly p&i on a $900k loan is about $5k at 5%/30 years. So a $100k income can’t make that without some additional income sources.

parkingrift 4y ago
Ha. Good point. Makes me actually wonder whether this was designed to be abused.