California Just Approved a New Mortgage Policy That Looks Just Like What Led to the Financial Crisis of 2008

Does everyone remember the 2008 financial crisis that hit right before the presidential election that year?

Most experts agree that one of the driving causes of the crisis was a government policy put into place under President Clinton that allowed unqualified home buyers to not only buy a home, but to buy way more than they could afford.

When these home loans began defaulting in huge numbers, they dragged down or even destroyed the investment vehicles they had been bundled into by banks and it became a snowball effect.

Now California is about to try this again, because of course they are.

BREAKING: California voters just passed Prop 37. Buyers of newly built homes can now put down 3% instead of 20%.

How: the state lends you the other 17% as a second mortgage, funded by up to $25 billion in bonds.

On an $800,000 home that’s $24,000 down instead of $160,000.

— The Assembly (@InTheAssembly) November 6, 2026

What could possibly go wrong?

KCRA News reports:

California voters approved Proposition 37 on Tuesday, creating a loan program to help qualified buyers cover part of their down payment on newly built homes.

Mortgage broker Matthew Cole said the program could provide significant benefits for buyers.

“This one could be really cool, right? Anything that eliminates mortgage insurance and hopefully gives them an affordable payment. All the while, you know, hopefully these housing prices do settle down. Hopefully interest rates settle down and give these buyers even more affordable opportunity to become homeowners,” Cole said.

The program will allow the state to issue up to $25 billion in bonds, enabling qualified buyers to borrow up to 17% of a home’s purchase price. Buyers would still need to contribute at least 3% of the down payment themselves, with a primary mortgage covering the remaining cost.

Naturally, the program is open to people in the country illegally.

In case you’re wondering, the eligibility requirements for this do not include US citizenship or any legal status.

Just “proof of residency” in California for one year. https://t.co/dubva4DQSZ

— Bill Melugin (@BillMelugin_) November 6, 2026

Create more demand on weaker borrowers. What could go wrong? pic.twitter.com/S8wdAqzCOo

— Tony (@1st_12151791) November 6, 2026

What’s that old saying about what happens to people who don’t understand history?

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