California Gov. Gavin Newsom, according to the Los Angeles Times, is set to unveil a new $100-million proposal aimed at helping survivors of the 2025 wildfires bridge the financial gap required to rebuild their homes.

The initiative is part of the revised 2026-27 state budget proposal released today.

The proposal comes in response to staggering data regarding the “insurance gap” — the difference between insurance payouts and the actual cost of construction. According to a Department of Angels report, wildfire victims in Los Angeles County face an average shortfall of over $600,000. In high-cost areas like Malibu and Pacific Palisades, that gap can soar to as much as $1.73 million.

The $100-million fund is designed to make construction loans more accessible and affordable through two primary mechanisms:

• Loan-loss guarantees. The state will act as a partial backer for loans, committing to cover a portion of the debt if a borrower defaults. This reduces risk for lenders, encouraging them to approve construction loans for residents who might otherwise be denied.
• Interest rate buy-downs. Homeowners can use the funds to lower their interest rates during the construction period, reducing the monthly financial burden of rebuilding.

The timing of the proposal is bolstered by an unexpected surge in state tax revenue. Analysts attribute this boon to a stock market boom driven by the Artificial Intelligence industry. This additional income has significantly cushioned the state budget, allowing the administration to address recovery needs without making major cuts to other essential programs.

The proposal will move forward as a “trailer bill” alongside the 2026-27 state budget. While the funding is intended for disaster survivors, specific eligibility requirements and geographic reach will be finalized during upcoming legislative negotiations.

This new fund would complement CalAssist, an existing state program that provides up to $100,000 in mortgage relief grants to wildfire survivors.

You can read more here.