SACRAMENTO — Gov. Gavin Newsom will propose a new $100-million fund to help wildfire victims afford loans to rebuild their homes under a revised budget plan set to be released Thursday.
The Newsom administration estimates that thousands of victims of the Los Angeles wildfires cannot afford to rebuild, blaming a lack of access to affordable loans and a gap between insurance payouts and the cost to build again.
“We have been on the ground in L.A. since Day One of recovery from these fires, and we aren’t turning our backs now,” Newsom said in a statement. “This community deserves continued support to help them get back on their feet, and rebuild their homes and their lives. “
The new fund would be designed to cover loan-loss guarantee to lenders, in which the state would commit to paying back a percentage of a loan amount if a borrower defaults, in order to lower the risk for lenders and encourage them to award construction loans to borrowers who might not otherwise qualify or only be eligible for loans at high interest rates. The money would also be available for homeowners to buy down their interest rates during the construction period, according to Newsom’s office.
The Eaton and Palisades fires killed 31 people and destroyed over 16,000 structures in January 2025.
A recent survey of the wildfire victims found that homeowners estimate they need more than $600,000 on average above their insurance payouts to rebuild their homes, according to a report from a wildfire recovery nonprofit called the Department of Angels. The gap in Altadena was about $550,000, and between $1.19 million and $1.73 million in Pacific Palisades and Malibu.
Under Newsom, California has also provided mortgage relief to more than a thousand wildfire survivors under CalAssist, a program that provides grants to eligible homeowners to cover mortgage payments for 12 months up to $100,000.
The governor’s new proposal will be included in his funding plan for the upcoming 2026-27 budget year that begins July 1.
State revenue from income tax collection is higher than initially forecast, a boon that is expected to wipe out a projected deficit in the year ahead. Analysts attribute the revenue increase to an artificial intelligence boom in the stock market.
Though likely temporary, the extra funding is expected to give Newsom enough cushion to balance the state budget without major cuts and lower a projected shortfall in 2027-28.
The proposal to create the rebuilding fund requires support from both houses of the California Legislature and would move forward as a trailer bill accompanying the state budget. The funding would be available to disaster survivors, though details on eligibility will be determined during the legislative process.
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