Proposition 12 - Veteran Bonds Act of 2008
This measure will allow California to issue $900 billion in bonds to help veterans buy homes with low interest rate mortgages. Specifically, veterans will be able to qualify for these traditional fixed rate mortgages through the CalVet program. Typically, these mortgages would carry rates below market and would cater to the needs of veterans. While this measure will be voted for on November 4th along with the presidential election, the CalVet program is certainly no stranger to California.
What is CalVet?
The CalVet program began in 1921 and this November 4th will be the 27th time it has been on the ballot. As with most government program, the California Department of Veteran Affairs confirms that the CalVet program is “tightly controlled and heavily regulated“. The program makes sure to verify the veterans eligibility as well as their ability to repay these loans. The department also keeps a close eye on the offered mortgage rates and may adjust these rates to make sure the bonds are paid back without assistance. Since 1923, the program has helped over 425,000 Californian veterans; veterans who have served from World War I, World War II, Korea, Vietnam, and most recently Iraq and Afghanistan.
The programs offered by CalVet are quite traditional and provide a stark contrast to the trend of exotic and creative mortgages we’ve seen recently. As an example, CalVet would offer home loans at a simple 5.5% 30 year fixed mortgage while nationwide averages might be at 5.87%. Interestingly, the CalVet program has not costs taxpayers a single dime since its origination in 1921-so far, veterans have paid back every loan.
Supporters of Prop 12
In Sacramento, the Assembly and Senate voted unanimously for the legislation; quite an unusual surprise not often seen in Sacramento legislation. Supporters of the proposition hope to show their support for these brave veterans by extending this program to ensure their housing needs. If the veterans payback their loans, the measure would come at no cost to taxpayers; a likelihood when compared to the significant trend since its origination.
Opposition of Prop 12
There is some opposition of Prop 12 and the most common arguments come down to eligibility and money. First of all, some argue that the program should be strictly limited to veterans who saw combat during these wartimes, instead of all veterans including noncombat individuals. Financially, while the trend has been promising, there is still a chance for taxpayers to end up paying for such a measure. While the costs are supposed to be paid back by borrowers, there is always the slight chance that taxpayers could foot the bill in the future.
There’s almost a general expectation that this measure will pass, but if you’re looking for a way to support your troops, Proposition 12 is a great opportunity for you to do so. On a side note, I couldn’t help but observe the spectacular streak of non-default within the CalVet program myself; if only more would have stuck to the traditional 30 year fixed mortgage. If only.
Full Story @ SFGate & PasadenaNews
(12 votes, average: 4.92 out of 5)
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These things always pass, and are always pretty small. It’s a decent program, and the bond has passed something like 20 times over the last 100 years. It likely will again.
There’s not really much of an argument against this. The state legislature voted unanimous for it and the democratic and republican parties both support it. The opposing view written in the official state ballot is from an attorney that has a thing for writing opposing positions on ballot measures.
Historically, California voters have approved every CAL-VET Bond Acts (all 26 from 1922 to 2000).
I’m supporting this proposition.
Note that active duty personnel can also apply for Cal-Vet loans, if they are state residents.
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