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CALIFORNIA ELECTIONS

Prop. 12 would help vets buy homes

October 09, 2008|Patrick McGreevy | Times Staff Writer

SACRAMENTO — With hundreds of veterans returning to California from service in Iraq and Afghanistan, voters are being asked to borrow $900 million to provide low-cost mortgages for those who served in the military.

Californians have approved similar requests 26 times before, allocating $8.4 billion toward home loans for more than 420,000 veterans of World War I, World War II, Korea, Vietnam, and Iraq and Afghanistan.

The latest measure, Proposition 12 on the Nov. 4 ballot, "continues a long tradition of assisting veterans," said state Sen. Mark Wyland (R-Escondido), the author, who is also the chairman of the Senate Committee on Veterans Affairs.

"We owe something to folks who served us by defending this country," he said.

Because there are interest charges on the borrowing, the total amount that would have to be paid back over 30 years is $1.8 billion.

About $102 million remains from previous bonds, but demand for those funds is expected to increase as the conflict in Iraq winds down.

The proposition, which the nonpartisan legislative analyst said would allow about 3,600 veterans to buy affordable homes, was put on the ballot by unanimous votes of the state Assembly and Senate and a signature from Gov. Arnold Schwarzenegger.

It would "help California's veterans achieve the American dream of homeownership," according to the governor.

Bond proceeds are used by the state Department of Veterans Affairs in a program called CalVet to purchase farms, houses and mobile homes that are then resold to California veterans.

Wyland said a key selling point is that the bonds are repaid by the veterans through mortgage payments.

The measure specifies that state general fund money would be tapped if loan payments from participating veterans were insufficient.

Wyland said taxpayers have not had to cover any costs since the program's inception.

For that reason, the Howard Jarvis Taxpayers Assn., which often opposes bond measures, is neutral on Proposition 12, according to President Jon Coupal.

Although there is no organized campaign against the measure, Gary B. Wesley, a Mountain View attorney, filed a ballot argument against Proposition 12, saying there would be costs to taxpayers if it passed.

He said money that people might put into private investments, the profits on which are taxable and generate money for the state, would instead go to buy state bonds, which do not generate tax income.

In addition, he said, "in this time of peril in the mortgage market there might be some defaults that won't be covered" without taxpayer support.

He also argued that with limited money available, any bond proceeds should go first to injured veterans and those who served in combat zones. As the proposition is written, the bond money would also be available to those who served in the military without leaving the United States.

Wyland called Wesley's argument "bogus," noting that people who join the military do so with the knowledge that they can be sent into a combat area at any time.

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patrick.mcgreevy@latimes.com

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