California MBA backs $100M fund in governor’s budget proposal for wildfire rebuilding

The California Mortgage Bankers Association (CMBA) voiced strong support for Gov. Gavin Newsom’s proposed $100 million allocation for the Southern California Rebuild Fund included in this month’s revised state budget proposal, the trade group said this week.

The proposed funding is designed to expand access to construction financing for homeowners affected by last year’s Southern California wildfires by helping to bridge the gap between insurance payouts and actual rebuilding costs. In many fire-damaged areas, replacement costs have risen faster than insurance coverage limits, leaving borrowers with shortfalls that can stall reconstruction and strain mortgage performance.

“California MBA strongly supports the Governor’s proposed investment in the Southern California Rebuild Fund because wildfire survivors need more than temporary relief, they need realistic pathways to rebuild their homes and communities,” Paul Gigliotti, CEO of the California Mortgage Bankers Association, said in a statement.

“Many homeowners are facing a major financing gap between insurance coverage and actual reconstruction costs. This proposal recognizes that challenge and creates meaningful tools to help families access financing, move forward with rebuilding, and return to their communities.”

CMBA advocacy around natural disasters

Earlier this week, Gigliotti made an appearance on the HousingWire Daily podcast and spoke with Editor in Chief Sarah Wheeler about CMBA’s efforts in this area. They also discussed the appointment of Rohit Chopra, the former director of the Consumer Financial Protection Bureau (CFPB), to lead the newly formed California Business and Consumer Services Agency.

In March, Gigliotti told HousingWire that his organization was working with state lawmakers on the effectiveness of mortgage forbearance in the wake of the wildfires. CMBA testified at a hearing that forbearance offers important short-term assistance but is not a long-term solution, and extending it without a defined path forward could increase financial strain on borrowers over time.

“Forbearance is a bridge — but we have to be just as focused on what comes next,” Gigliotti said. “We are ready to work alongside Assemblymembers and stakeholders to build scalable solutions that address the full recovery process — not just lending, but insurance, permitting, and housing stability. If we get this right, California has the opportunity to lead the nation in how we respond to natural disasters.”

More details on the Rebuild Fund

California MBA said it has been working with the Newsom administration, legislators, state agencies and industry partners since late 2025 to develop recovery solutions that support consumers while aligning with federal servicing standards, investor requirements and the operational realities of mortgage lending.

Under the governor’s proposal, the Southern California Rebuild Fund would be administered through programs that leverage private capital and expand access to reconstruction lending for disaster-impacted homeowners. Tools envisioned in the framework include a loan-loss guarantee program, interest rate buydown assistance for reconstruction loans, and potential subordinate financing and other mortgage assistance options.

The CMBA noted that these mechanisms could lower risk for participating lenders, improve pricing on construction and renovation products, and help borrowers qualify for the additional funds needed to complete repairs. For mortgage servicers and investors, faster access to reconstruction financing can shorten loss-mitigation timelines and reduce the risk of prolonged vacancy or default in fire-damaged communities.

The trade group and industry partners are also backing a new consumer-facing online portal powered by Prudent AI. The portal is intended to connect wildfire-affected homeowners with participating lenders and recovery resources by collecting borrower information and comparing it against lender matrices from construction lending partners, including CMG Financial and Guild Mortgage.

Using data and analytics from Cotality, the system will match consumers with lenders best suited to provide a construction loan based on the borrower’s profile and rebuilding needs.

“We are proud that California MBA has been engaged as a constructive and solutions-oriented partner throughout this process,” Gigliotti said. “We are committed to helping develop real-world solutions that support homeowners, enhance communities, and strengthen responsible lending practices.”

The governor’s revised budget proposal now moves to the California Legislature for negotiations ahead of the June 15 constitutional budget deadline. Lenders and servicers operating in wildfire-prone regions will be watching to see how the fund is structured, as budget language and implementing regulations will determine how loan guarantees, buydowns and subordinate financing can be integrated into existing construction and renovation products.

Neil Pierson reported and wrote this article with drafting assistance from HousingWire Automation, an editorial tool that helps transform announcements and industry data into HousingWire-style news coverage.