Owning a home in Silicon Valley might seem like an impossible goal for most working families.
With average home prices in San Jose now exceeding $1 million, according to Zillow, elected leaders fear the dream of home ownership might be out of reach for nurses, teachers and public safety officers. But a new program, presented Wednesday by Santa Clara County Supervisor Cindy Chavez, could help unlock the door for thousands of homebuyers.
The county plan allocates $25 million in funding from Measure A, a $950 million voter-approved housing bond, for a first-time homebuyer down payment program. About $25 million is available right now, Chavez said, and anyone making up to $105,000 as a single person or up to $120,000 as a couple qualifies.
Several dozen hopeful homebuyers and curious Santa Clara County residents packed a San Jose State University meeting room Wednesday to learn more about the program. Chavez brought the presentation to the university in the hopes of empowering professors and faculty to buy homes — like a homeless SJSU professor who, according to KPIX, lived in her car while teaching at the school in 2017.
The supervisor said the county will reinvest the loans, once repaid, back into the program to help more first-time homebuyers.
The Board of Supervisors in 2018 approved an initial $25 million from Measure A funds to assist first-time homebuyers in Santa Clara County, Menlo Park and East Palo Alto, and launched the county’s Empower Homebuyers program, which in total has up to $50 million of that Measure A funding. The board can tap into the remaining available $25 million, if needed.
“There’s no interest on this loan,” said Adria Quiñones-Masur of the Housing Trust Silicon Valley, which is administering the assistance program.
Through the program, the county offers 30-year deferred Homebuyer Empowerment Loan Program (HELP) loans, which can be the value of half of a home’s down payment, or up to 10-percent of a maximum-priced $800,000 house. Buyers will pay back a certain percentage of the home’s value, and payment on the loan is deferred until the loan reaches its maturity date. Three-percent of the down payment must also be covered by the buyer.
To qualify, buyers must apply for the program, find an approved lender and take a HUD certified 8-hour homebuyer education class.
Lillian Herrera, a retired real estate agent, said many people qualify to purchase a home in today’s market, but “where are they going to get 30-percent [of the down payment]?” Herrera said the program could open doors for middle class and low-wage workers who are struggling to stay in pricey Silicon Valley.
Herrera said her parents bought their first home in Santa Clara County in the 1960s for about $11,400. Today it’s worth about $749,00, she said, and her family still lives in the home.
“It wasn’t like they bought it to sell it,” she said.
Becoming a homeowner is something Herrera hopes for her daughter and SJSU alumna, Erika Chavez, who also attended Wednesday’s meeting.
Erika Chavez took the required 8-hour HUD class last year. She said she thinks people are hesitant to buy property in this region, especially hopeful first-time buyers like herself.
“A lot of times people are so overwhelmed, they put it off,” Erika Chavez said, and then they just don’t buy a home.
She doesn’t want to wait, though.
“I’m going to get the ball rolling and get something in motion,” she said. “It gives you hope.”
Properties covered under the program must be single-family homes, apartments and condominiums — not duplexes, triplexes or manufactured or mobile homes — and cannot be rented out to others. Quiñones-Masur said this means no AirBnB-ing your new home.
Click here to learn more about the program.
Contact Kyle Martin at [email protected] or follow him @Kyle_Martin35 on Twitter.