LOS ANGELES

The final proposition that will appear on California's November ballot seeks voter approval to continue funding a state-run home loan program for war veterans. It will be the 27th time such a measure has come before the state's voters.

If it's passed, as the previous 26 versions have, Proposition 12 would allow the state to issue $900 million in bonds to fund the existing CalVet Home Loan program so it can cover veterans who have served in the military since 1977.

The program, which previously was available only to those who served before 1977, helps California veterans buy homes, mobile homes and farms.

The state uses borrowed money to buy properties that are then sold to veterans who repay the state with 30-year, low-interest, fixed-rate loans. Veterns are eligible for three types of loans, with interest rates varying from 5.5 percent to 6.2 percent.

The Veterans' Bond Act of 2008 would pay for at least 3,900 loans, or 1,300 a year for three years.

The last time Californians approved more money for the program was in 2000, when Proposition 32 passed with 67 percent of the vote.

The state Legislative Analyst's Office says the total cost of this year's initiative would be about $1.8 billion, with interest. But the goal of the program is that it costs the state nothing because of the repayments.

Legally, the state is ultimately responsible for paying back the bond money, but it has never had to use taxpayer money to cover the cost of a defaulted loan, said J.P. Tremblay, deputy secretary for the California Department of Veterans Affairs.

"The state has never had to come in and bail out this fund," he said. "The veterans service the debt, and they service the program."

The state protects itself by keeping the property deeds until veterans have fully repaid their loans so it can sell the property if a veteran defaults.

The bill that provides for the initiative to be on the ballot - which was written by state Sen. Mark Wyland, a Republican from Carlsbad - passed unanimously in the Senate and Assembly and was signed by Gov. Arnold Schwarzenegger in July.

"I'm asking voters to say yes in November so that veterans who risked their lives in places like Kuwait, Iraq and Afghanistan will be eligible to join the more than 420,000 others who have bought a home with a CalVet loan - at no expense to taxpayers," Schwarzenegger said in a prepared statement at the time he signed the bill.

The program does not help veterans with down payments, and they have to go through a credit check to qualify for the loans.

Opponents argue that taxpayers indirectly end up incurring some costs of the program because the interest paid back to investors who buy the state's bonds is tax free. In addition, they say the program should limit its scope to include only veterans who served in combat zones. Currently, the program is available to any veteran who does not have a dishonorable discharge.

On the Net: California Department of Veteran Affairs: http://www.cdva.ca.gov/