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CalHFA legislative update: Newsom proposes new housing agency; board flags federal funding freeze as risk
Summary
CalHFA's legislative director briefed the board on the Governor's 2025–26 budget proposal to create a California housing and homelessness agency and flagged Assembly Bill 57 (a CalHFA-targeted down-payment set-aside). Board members raised concerns about an ongoing federal funding freeze that briefly limited access to Section 8 disbursements and requested a vulnerability analysis.
CalHFA’s Director of Legislation, Mejji Tabar, told the board on Jan. 28 that Governor Newsom’s Jan. 10 budget proposal includes a plan to create a new California housing and homelessness agency intended to improve affordability, efficiency and accountability across state programs.
Tabar said the Administration plans to refine the reorganization and transition details in the May budget revise and pursue the proposal through the Little Hoover Commission for review; the Commission’s public review would inform a legislative recommendation. Tabar identified three priorities that will shape the reorganization’s details: affordability, efficiency and accountability.
Tabar also flagged Assembly Bill 57 (Assembly Member McKinner), which would create a set-aside within CalHFA’s down-payment assistance programs for descendants of enslaved people; the bill has been introduced and staff are awaiting policy referrals.
On federal matters, Tabar summarized outreach to the California congressional delegation and NCSHA on priorities such as increasing low-income housing tax-credit capacity and disaster recovery tax credits. During board discussion, members expressed alarm about reports that Section 8 rental assistance disbursements were temporarily inaccessible due to a federal funding freeze. Secretary Moss and other board members noted the governor and legislature approved roughly $2.6 billion in emergency wildfire relief and that agency teams are coordinating with partners to support recovery.
Directors asked staff to prepare a vulnerability analysis on federal pauses and program impacts and to return to the board with more information next month. Tabar and other agency staff said CalHFA feels insulated on many programs but would report back once federal guidance and details on disbursement status are available.
