Full House: First-time homebuyer program draws crowd
The notoriously high price of existing homes in Santa Clara County has made first-time ownership little more than an ever-fading dream for many households. Among them are social workers from community-based organizations, health care professionals, teachers and school employees, and public employees of the County, cities and other public agencies.
For that reason, hundreds packed the County Board of Supervisors Chamber on Nov. 28. That evening, officials introduced Empower Homebuyers SCC, the first phase of a loan program that would, over the next five years, help about 250 would-be first-time homebuyers with down payment assistance.
The inability to come up with 20 percent down is one of the major obstacles to first-time homebuyers in pricey Silicon Valley. Empower Homebuyers SCC would loan applicants up to 17 percent of the purchase price to be used toward the down payment. The payment is deferred for 30 years or until the home is sold, refinanced or the home is no longer owner-occupied.
No wonder attendees were eager to find out how to apply and learn whether they might qualify. The loans will go to qualified applicants whose household incomes don’t exceed 120 percent of the area median income for Santa Clara County. The current income limit for a four-person household is $150,250.
Santa Clara County Supervisor Cindy Chavez welcomed the crowd, which listened intently to a presentation from the Housing Trust of Silicon Valley and the County Office of Supportive Housing.
“In 2016, Santa Clara County voters passed a $950 million bond focused on affordable housing (Measure A),” Chavez said afterward in an interview with Newsbeat. “Up to $50 million of that was set aside to be used for first-time homebuyers. And tonight — which was so exciting — was to introduce the program to first-time homebuyers.”
The meeting was about the first $25 million phase of the program. Depending on the success of the initial phase, the Board of Supervisors could consider additional funding for the program in the future.
The launch comes at a good time for people who had been despairing of ever buying a house in the valley. Prices have softened a little since midsummer, giving some of them a reason to be hopeful for the first time in a while.
“Now that we see a little bit more inventory, or homes on the market, they want to see if they can apply and get their first home,” said Housing Trust Silicon Valley’s director of homebuyer programs, Adria Quinones-Masur. The County has partnered with Housing Trust to administer Empower Homebuyers SCC.
People who have scrimped for many years but failed to save enough money to put down on a home are eager to get the ball rolling at last.
“Hopefully, when we apply, we can make things happen,” says San Jose resident Isaac Herrera, who was excited to attend the launch. “A lot of people out here in the Bay Area, we haven’t been able to buy a home in years.”
So many obstacles
“Low inventory, rising interest rates and student loan debt are all factors contributing to the suppression of first-time homebuyers,” National Association of Realtors chief economist Lawrence Yun noted in a recent news release touching on the subject.
Nowhere, however, is the situation more difficult than in Santa Clara County, where the housing affordability index is abysmal compared with almost anywhere outside the Bay Area.
Here, just 17 percent of households made enough money to afford a median-priced, single-family home, according to the California Association of Realtors’ most recent report.
To qualify for a typical loan to buy the median-priced home in Santa Clara County ($1.3 million), a household would need to pull down a cool $277,310 a year.
Off to a running start
Attendance at the program launch events and the number of people on the interest list point to a high demand for Empower Homebuyers SCC.
“So far it’s been very encouraging in terms of the number of people … on our interest list. It’s in the hundreds,” says Michael Norris, a spokesman for Housing Trust Silicon Valley.
For more information on how the program works, go to the Empower Homebuyers SCC page on the Housing Trust Silicon Valley website.
— Chuck Carroll, Newsbeat editor
— Videography by Arnel Cayabyab and Rabih Chahine; video editing by Cayabyab
Do you qualify?
You may qualify for Empower Homebuyers SCC if you:
- Are a first-time homebuyer buying a primary residence in Santa Clara County.
- Have pre-approval from an approved lender (done prior to submitting application). Your gross household income is within the designated income limits.
- Complete a HUD-certified eight-hour homebuyer education class through the designated agency.
- Have a minimum middle FICO score of 680.
- Can put down at least 3 percent of a home’s purchase price.