NOV. 2 WATCH : Proposition 173

Homeownership has always been a key aspiration in the American experience. Yet for a majority of Californians, buying a first home is a frustratingly elusive goal. Despite falling real estate prices and lower interest rates, the median price of a California home remains a daunting figure, about $190,000--more than twice the price of the average U.S. home.

Proposition 173 on the Nov. 2 ballot would help 5,000 to 10,000 first-time home buyers each year, the state legislative analyst estimates. The measure reauthorizes the state treasurer to sell $185 million in housing bonds that were originally approved by voters in 1982 to help reduce the mortgage interest payments of many first-time buyers.

The proposition, which needs only a simple majority to pass, would provide mortgage insurance in cases where the down payment on a home is less than 20%. For example, in Los Angeles County it would enable police officers, teachers and others earning less than $59,000 to buy a home with as little as 3% down. For many, this would be decisive: A typical down payment would otherwise be more than their yearly income. On a $200,000 dwelling in L.A. County without mortgage insurance a home buyer must put down 20%, or $40,000. If Proposition 173 is approved, a buyer with mortgage insurance could purchase the same home with $6,000 down.

Under 173, buyers’ credit histories would be carefully screened. Best of all, the program is self-financed--the insurance premiums paid by the home purchasers would pay off the bonds.