He cited the lack of funding for the program in his letter announcing the veto to the California State Assembly.

Democrats in both state chambers will now have the option to override Newsom’s veto with a two-thirds majority vote. Democrats own majorities in the State Assembly, 62-17, and Senate, 31-9. It originally passed 53-18 in the lower chamber and 25-14 in the upper chamber.

“Given the finite funding available for CalHFA programs, expanding program eligibility must be carefully considered within the broader context of the annual state budget to ensure we manage our resources effectively,” the letter says. “For this reason, I am unable to sign this bill.”

Democratic Assemblyman Joaquin Arambula of Fresno introduced the bill, called the “California Dream for All” loan program. Arambula pitched the bill as a response to federal law, which does not allow illegal immigrants to receive state benefits without a state law that makes them eligible.

“We simply wanted to be as inclusive as possible within our policies so that all who are paying taxes here in our state were able to qualify,” Arambula told Politico.

Arambula said in a statement that he was “deeply disappointed” in the veto, contending that the bill was not about immigrant policies or the housing crisis.

“I have always believed this bill is about fairness,” Arambula said. “The veto doesn’t change the fact that many people — including undocumented immigrants — dream of owning a home so that generational wealth can be passed to their children. They are people who are responsible, work hard, and pay their ample share of taxes.”

Newsom has stopped the bill’s progress for now. He indicated through a spokesperson to the Washington Examiner previously that he would “evaluate the bill on its merits should it reach his desk.”

National and state Republicans opposed the bill. Republican presidential nominee former President Donald Trump’s press secretary, Karoline Leavitt, told Politico that the bill was “fundamentally unfair but typical Democrat policy.”

Republican state Sen. Brian Dahle told Politico that Newsom did the right thing by vetoing the bill. But he passed on further praise, saying Newsom “read the tea leaves” on the bill’s political impact.

“He’s the master of gaslighting,” Dahle said. “I mean, they’ve been doing it forever. I’ve been here 12 years, and all they do is politics.”

In an unrelated briefing, Newsom explained his veto: “The bill that was sent to me was [on] a program that had no money, and it was expanding eligibility to a program that had no money. It seemed rather curious to me. So it was unnecessary and completely consistent with prior vetoes along those similar lines.”

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California is one of the most expensive states in the country in which to buy a home and has the largest share of illegal immigrants nationwide, meaning the program likely would have proved expensive.

Newsom will be ineligible for reelection in 2026 but has regularly been mentioned as a future Democratic presidential nominee.