Is Measure A’s loan program for first-time homebuyers working?
Joel and Kaira Gallardo Wulff play in their new backyard in San Jose. Photo courtesy of David Wulff.

    David Wulff and and Karina Gallardo Wulff were planning on leaving Santa Clara County if they couldn’t buy a house soon.

    The couple, who have two children, ages seven and five, had always lived in apartments. But they wanted more space and a yard, particularly for their kids to play in.

    The median sale price for a home in Santa Clara County is $1.4 million, while homes in San Jose go for, on average, a bit more than $1 million, according to Zillow. The couple was going to need help, regardless of how much money they saved.

    That’s where the county’s Empower Homebuyers loan came in. The program, funded through the Measure A housing bond passed in 2016, is intended to provide up to $25 million in down-payment loans for first-time homebuyers.

    The average loan size through the program is a bit more than $100,000, while the maximum home value for buyers in the program is $800,000, meaning the loan helps with a considerable chunk of the purchase price.

    The loan, administered by Housing Trust Silicon Valley, was the only way David and Karina were able to buy their first home. When they applied for the Empower loan last year, they were rejected. This year, they got the help and the home.

    But they’re only one of just more than 20 successful applicants who have received Empower loans, even though the program has been up and running for more than two years. Meanwhile, there have been about 80 applications and about 400 interest forms completed in the first half of 2020 alone.

    A citizen’s oversight committee of Measure A in September criticized the small amount of loans that have been granted so far, and said the county should be doing more to help families buy homes.

    Why the big difference?

    Potential applicants are possibly weeded out because the loan application process requires extensive knowledge of the home- buying process.

    Adria Quinones-Masur, programs manager at Housing Trust Silicon Valley, said those who express interest in the loan program often are not be entirely prepared.

    “Some people are just starting and some are just ready to go. Everyone is at different steps,” Quinones-Masur said. “We always tell people in our presentations that if they’re just starting out, that’s okay. We still want to provide information. If they have that dream of homeownership, far be it from us to prevent them from getting it.”

    David Wulff said the process of applying the first time helped him and his wife realize what they needed to do to differently. The first time, the couple was well into the process before they realized they wouldn’t have money in reserve to qualify.

    “It’s a really difficult thing to keep saving, saving, saving, but it’s worth it,” Karina Wulff said.

    That information gap for first-time homebuyers is something the county’s Office of Supportive Housing is trying to solve, too. The department is adding more staff to help guide people through the process, so a missing document or a misunderstanding don’t ultimately disqualify applicants.

    David Wulff (left) and Karina Gallardo Wulff (right) with their children in their yard at their new home in San Jose. Photo courtesy of David Wulff.

    Once the Wulffs did get the Empower loan pre-approval, as well as the mortgage loan pre-approval from their bank, they still had to go out and find a house.

    “We had to get lucky, and we did,” David said. “It was a limited inventory. There were a lot of buyers, a lot of interest and not a lot of inventory. There were only seven homes in our price range.”

    In the past couple of months, Quinones-Masur said she’s seen interest in the program rise even further, and Housing Trust has processed several more loans.

    “I think (the increased interest) has to do what we’re dealing with lately: Covid-19, low interest rates, more properties have been coming on the market for the purchase price $800,000 and below – there’s more activity,” Quinones-Masur said.  “We’ve had buyers get into contracts within a week. They’re probably already looking and have their eye on something. Some people do take a bit longer, but from the buyers that we’ve seen, they’re serious.”

    Contact Madelyn Reese at [email protected] and follow her @MadelynGReese

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