First -Time Homebuyers
The San Diego Housing Commission offers deferred loans, closing-cost assistance grants, and mortgage credit certificates to help low- and moderate-income residents become first-time homebuyers. Since 1990, we’ve helped more than 4,700 families and individuals buy their first homes. There are three different homebuyer programs, the latest of which was created in 2009 with limited funding under the federal Neighborhood Stabilization Program (NSP). The NSP is funded in whole or in part with funds provided by the U.S. Department of Housing and Urban Development (HUD). In addition, the Housing Commission operates a citywide first-time homebuyer program and administers a homebuyer program for the City of La Mesa.
Who is Eligible?
The Housing Commission's primary program is limited to those planning to buy a home within the City of San Diego, or neighorhoods with postal ZIP codes that begin with 921. “First-time homebuyer” is defined as someone who has not owned a home that served as a primary residence for at least three years. Each homebuyer program has limits on annual household income and the purchase price of a home.
San Diego Citywide First-time Homebuyer Program
Applicants may only purchase a home within the boundaries of the city of San Diego. Households to be assisted are low to moderate income.
- Area Median Income (AMI)
Assistance offered under this program includes:
Shared Appreciation Loan
Eligible buyers earning no more than 80 percent AMI may qualify to receive a “shared appreciation” loan of up to 17 percent of the purchase price. No payments are required for 30 years, unless you sell or refinance the home, at which time you are required to pay back the principal plus a share of the net equity. To qualify, you must obtain a fixed-rate first trust deed loan and have adequate income, a good credit rating, and provide a minimum down payment of 3 percent. Applicants also must attend a homebuyer education class.
Grant for Closing Costs
Grants are available to help homebuyers pay closing costs. Households whose earnings are no greater than 80 percent of the Area Media Income are eligible for up to $15,000 or 4 percent of the purchase price whichever less; households earning up to 100 percent of the AMI are eligible for up to $10,000 or 4 percent of the purchase price, whichever is less. Grants must be repaid if the home is sold, refinanced or no longer owner-occupied within the first six years, after which it is forgiven.
Mortgage Credit Certificate
Qualified homebuyers with income not exceeeding 140 percent of AMI may claim a federal income tax credit of either 15 percent or 20 percent of the annual interest paid on their mortgage for as long as they reside in the home. The resulting reduction in tax burden increases buyers’ net earnings and helps them qualify for a mortgage. Homebuyers may have to repay the tax if they sell their residence within nine years.
Neighborhood Stabilization Program
The Neighborhood Stabilization Program (NSP) is funded in whole or in part with funds provided by the U.S Department of Housing and Urban Development (HUD). The $9.4 million federal grant was intended to prevent blight in communities suffering the highest foreclosure rates.
Using NSP funds, the Housing Commission in 2009-10 helped 55 low- and moderate- income families purchase homes that had fallen into foreclosure. It also rescued a partially completed condominium project and converted it into an affordable apartment complex.
The agency spent approximately $4.5 million helping first-time homebuyers purchase homes in targeted areas from San Ysidro to Miramar within City Council districts 3, 4, 7 and 8. Click here for district maps.
In addition, the Housing Commission allocated $3.6 million from the grant to help finance construction of the Georgia Street apartment complex, which will provide 31 new affordable rental units when it is completed in late 2011.
To qualify for the first-time homebuyer program, applicants were required to have good credit, sufficient income to pay the mortgage, and be able to make a 3 percent down payment. Also, their household income could not exceed 120 percent of the San Diego Area Median Income (AMI). That meant a family of four with household income not exceeding $89,900 annually could qualify.
Those who qualified were eligible for the following assistance:
- Zero percent interest on a deferred payment second trust deed loan up to 17 percent of the purchase price for a term of 30 years;
- Grants of up to 3 percent of the purchase price to offset closing costs. If the property remains owner-occupied for six years, the grant is forgiven;
- Mortgage tax credit certificates.
In addition, first-time homebuyers were able to obtain loans to rehabilitate their property. The rehab loans up to $10,000 can be forgiven after five years; loans from $10,000 to $30,000 can be forgiven after 10 years; and loans greater than $30,000 can be forgiven after 15 years.
City of San Diego Affordable For-Sale Housing
City of San Diego Affordable For-Sale Housing
The Affordable For-Sale Housing Program makes it possible for low-and-moderate income families to buy a home at a price that is affordable. The homes have been built by private developers. The properties meet the City of San Diego’s affordability requirements and are available at below market value.
There are six developments with long term affordability requirements that will have units for sale when they are resold by the original owner.
In most cases you do not need to be a first time homebuyer to purchase one of these affordable for-sale homes. However, to receive financial assistance from the San Diego Housing, you must be a first-time homebuyer. A first-time homebuyer is defined as someone who has not owned a home for the past three years.
First-Time Homebuyer Financial Assistance
If you are interested in purchasing a resale home, please complete and return the prequalification worksheet. Your name will then be placed on an interest list and we will contact you when an affordable unit is being resold if you appear to meet the eligibility criteria.
The completed worksheet can be faxed to (619) 578-7387 or emailed to vickim@sdhc.org. If you have questions regarding the Affordable For-Sale Housing Program, contact Vicki Monce at (619) 578-7491 or at vickim@sdhc.org
