Californians are reacting angrily to revelations that migrants who entered the US illegally could soon benefit from a taxpayer-funded state scheme to help hard-up residents buy homes.

Democrats on the California Senate Appropriations Committee have approved a bill to move forward that would open up the California Dream For All Shared Appreciation Loan program to non-legal migrants.

The scheme was launched last year and has already provided thousands of first-time homebuyers with loans of up to 20 percent of a house's purchase price for down payment or closing cost.