Gavin Newsom Floats $100 Million Wildfire Rebuild Fund

Nearly a year and a half after the deadly Palisades and Eaton fires, Gov. Gavin Newsom is proposing a $100 million state fund aimed at helping Los Angeles wildfire victims rebuild homes that insurance payouts won’t fully cover.

The proposal, set to be included in Newsom’s revised 2026-27 budget plan, would backstop construction loans for fire victims through loan-loss guarantees, lowering the risk for lenders and making financing more accessible for borrowers who otherwise might not qualify, the Los Angeles Times reported.

Through the loan-loss guarantees, the state would commit to paying back a percentage of a loan amount if a borrower defaults as a means of lowering risk for lenders and encouraging them to award construction loans to borrowers who might only be eligible for loans at high interest rates or who might not qualify at all. The state would also help homeowners buy down interest rates during the rebuilding process.

The move comes as thousands of property owners in Altadena, Pasadena, Pacific Palisades and Malibu confront a widening gap between insurance payouts and the actual cost of reconstruction. A recent survey by wildfire recovery nonprofit Department of Angels found that homeowners estimate they need more than $600,000 on average on top of their insurance payouts to rebuild. The shortfall was roughly $550,000 in Altadena and between about $1.2 million and $1.7 million in parts of the Palisades and Malibu.

Newsom framed the proposal as part of the state’s long-term recovery effort following the Eaton and Palisades fires, which killed 31 people and destroyed more than 16,000 structures earlier this year. The move addresses a broader problem emerging across wildfire-prone markets, as many insured homeowners remain drastically undercovered as labor, materials and permitting costs continue to climb.

The state has already rolled out mortgage relief through CalAssist, which has provided grants covering up to 12 months of mortgage payments, capped at $100,000, for more than 1,000 wildfire survivors. Newsom’s rebuilding fund still requires approval from the state legislature as part of a budget trailer bill.

Newsom’s proposal will be included in his funding plan for the upcoming 2026-27 budget year that begins July 1. The extra funding, though likely temporary, could help the governor balance the state budget without major cuts and lower a projected shortfall in 2027-28.

— Chris Malone Méndez