Prop. 12 Explained – Home Loans for Veterans, No Cost to Taxpayers. Vote Yes

Prop. 12 asks voters to approve $900 million in bonds to fund CalVet Home Loan Program for California veterans. The bonds are paid off by the loan-holders (the Vets who take out the loans), the taxpayers are not subsidizing any of this. The only reason this is on the ballot is because the California constitution requires that all bond measures be approved or rejected by a statewide ballot initiative. This program has been around since 1921 it’s on the ballot when the loan fund needs to be refilled due to inflation. As reported in the California Aggie, “since 1921, the voters have approved a total of about $8.4 billion to finance the veterans‘ farm and home purchase program, also known as Cal-Vet. As of July 2008, there was about $102 million left to support new loans.”

This measure has never been rejected, nor should it be.

Of course, the state is on the hook if the homeowners default, but the default rate on these Vet loans is practically zero, in part because the CalVet program won’t give loans for properties people can’t afford and they don’t issue subprime loans — this means the CalVet program is not likely to fall into the same problem were in now.

The only other opposition argument is that the loans should be limited to vets who actually saw combat, even if they served during wartime.  That argument does not make a whole lot of sense to us.

There is absolutely no good reason to vote against Prop. 12.

The Johnny California Editorial Board Recommends a YES vote on Prop. 12