City of San José Department of Housing
WelcomeHome Loan Assistance Program
The Program
The Welcome Home Loan Assistance Program offers a loan up to $25,000 for down payment assistance at 3% simple interest for lower-income first-time homebuyers.
Borrower Eligibility
• The household income cannot be greater than the amount shown below. Household income is the income received from all household members, including adult children, parents, and non-applicant spouses:
Household Size Maximum Qualifying Income
1 $ 56,500
2 64,600
3 72,650
4 80,700
5 87,200
• Teachers who are eligible for the San José Teacher Homebuyer Program may receive additional down payment assistance from the City.
• There is a minimum housing cost ratio of 28% of income. Buyers combining two or more City assistance programs must have a minimum housing cost ratio of 35%. In addition, each applicant must meet the underwriting criteria and statutory guidelines of each separate program.
• Normally, the borrower and any co-borrower(s) cannot have owned a home as a principal residence for the past three years. An exception is allowed for a “displaced homemaker” or a single parent who, while married, owned a home with his or her spouse.
• The borrower and any other co-borrowers must have minimum credit scores of at least 620.
• Normally, the borrower must obtain a 30 year fully amortized fixed rate mortgage. Also, the maximum housing cost-to-income ratio is 43% (the minimum housing ratio is 28%), and the maximum total debt-to-income ratio is 48%.
• The total amount financed cannot exceed 100% of the sales price. The City funds can only be used for downpayment assistance. The use of City funds for closing costs, buydowns, or prepaids are not eligible (max CLTV 100%). PMI financing is an ineligible activity above 100% (max CLTV 100%).
• All homes must be “owner occupied” for the life of the loan and “cash-out” refinances are limited and must be pre-approved by the City.
• Borrowers may not have greater than $60,000 in liquid assets at the close of escrow. In addition, the City will add inferred income from all capital accounts, including retirement accounts.
• A minimum household size of two persons is eligible to purchase a three-bedroom home and a three person household is eligible to purchase a four bedroom home.
Rev September 23, 2010- KKR Page 2 of 3 Welcome Home
• A property inspection by a City Housing Inspector may be required and the home must comply with all local, state and federal building codes. No illegal or unpermitted structures, alterations, or additions are allowed. In addition, the Department may conduct a lead based paint test for properties built prior to 1978. If the home contains chipping lead based paint or does not meet the local building codes, the property will not be eligible.
• The home must be located within the municipal boundaries of the City of San José (cannot be located in county pockets). If the home is located in a Federal Flood zone, the applicant will be required to obtain flood insurance.
• Borrowers can purchase single-family homes, town homes, and condominiums with a maximum purchase price not greater than 95% of the Area Median sales price. The current sales price limit is therefore set at $481,650. In addition, the property must be located within the municipal boundaries of San José.
• Only formerly owner occupied homes are eligible for assistance. The seller of the home must occupy the property as a primary residence or the home must be vacant. Properties being occupied by tenants, at the time the property is listed for sale, are not eligible and tenants must not have been required to move out in order to faciliate the sale or as a condition of the sale. The Housing Department will require the seller to sign an occupancy affidavit.
• The Household is comprised of ALL individuals who will be occupying the home over the upcoming twelve months. For additional information, refer to the City’s underwriting guidelines.
• Borrowers may be represented by any lender of their choosing. However, the City has compiled a List of Lenders who have actively participated in previous City-down payment programs. The list can be viewed at: http://www.sjhousing.org/program/HB/LenderList.pdf
CalHFA Partnership
This program is approved by CalHFA as an Affordable Housing Partnership Program (AHPP), under the names WelcomeHome-HOME or WelcomeHome-CalHome. The City reserves the right to fund each WelcomeHOME loan with either federal HOME or State CalHome funds and all loans are subject to the specific rules and regulations of each funding source.
Financial Terms
Loan Security--The loan is secured by a recorded deed of trust.
Amount Required for Down Payment/Closing Costs— While the transaction may be 100% financed, the City does require a minimum buyer contribution of 1% of the sales price, from his/her own funds, to close the transaction.
Loan Repayment Term(s)-- The City loan is due and payable in 30 years or upon transfer of title, or when the borrower fails to occupy the home as a primary residence.
Interest Rates of City loan – The interest rate is 3% simple interest, no prepayment penalty.
DownPayment Assistance—The funds can only be used for downpayment assistance. The use of City loan funds for closing costs, buydowns, or prepaids are not eligible.
Amortization Schedule for the $25,000 loan:
Year interest Balance Year Interest Balance
1 $750 $25,750 16 $750 37,000
2 750 26,500 17 750 37,750
3 750 27,250 18 750 38,500
4 750 28,000 19 750 39,250
5 750 28,750 20 750 40,000
6 750 29,500 21 750 40,750
7 750 30,250 22 750 41,500
8 750 31,000 23 750 42,250
9 750 31,750 24 750 43,000
10 750 32,500 25 750 43,750
11 750 33,250 26 750 44,500
12 750 34,000 27 750 45,250
13 750 34,750 28 750 46,000
14 750 35,500 29 750 46,750
15 750 36,250 30 750 47,500
If you continue to own your home at the end of the thirty years, you will receive a balloon payment notice from the City of San José in the amount of $47,500 ($25,000 loan original balance plus $22,500 interest).
Application Process
• Determine that you are eligible for the City down payment program by reviewing this form. This form has provided a summary of the City’s underwriting guidelines. The complete underwriting guidelines can be viewed at: www.sjhousing.org/program/homebuyer.html. Any questions regarding your eligiliblity should be directed to Robert Yow at (408) 975.4446, robert.yow@sanjoseca.gov. Lenders are encouraged to contact program staff on behalf of their clients prior to signing a purchase contract.
• Contact a lender to become pre-approved for a home loan. Your lender will ask you to sign the City application (www.sjhousing.org/program/HB/LoanApp.pdf) and this program summary. Your lender will forward these items to the City of San Jose at a later date.
• Completion of a HUD certified homebuyer education program is required prior to approval. You must obtain your homebuyer education from one of these organizations: Neighborhood Housing Services Silicon Valley (NHSSV)-408.279.2600, Project Sentinal-408.720.9888, or SurePath-800.540.2227. Applicants will be required to submit a certficate of completion as a part of their loan application package. Classes offered through the applicants individual lenders are not eligible.
• Work with a real estate agent of your choice to assist you in the search of your new home.
• Sign final loan documents at the title company.
• Move in and enjoy your home!
In addition to this program summary, all loans will be made in conformance with the City’s general underwriting guidelines. For more information, please visit the website at www.sjhousing.org/program/homebuyer.html and/or contact Robert Yow at (408) 975-4446 or send an email to robert.yow@sanjoseca.gov.
Rev September 23, 2010- KKR Page 3 of 3 Welcome Home
signature date signature date

C I T Y o f S A N J O S E
TEACHER and
CREDENTIALED STAFF
HOMEBUYER
PROGRAM

Cal i fornia’s Mos t
Educator -Fr i endly Ci ty

TEACHER AND CREDENTIALED STAFF
HOMEBUYER PROGRAM
The Teacher and
Credentialed Staff
Homebuyer Program
(THP) is an integral
part of the City's
effort to make
San José California's
most educatorfriendly
city. The goal
is to attract and retain
public school teachers
and credentialed staff
who are needed to
provide equality
education for San José
youth. To assist in
achieving this goal,
the THP offers a
deferred-payment
loan of $35,000 or
$50,000 depending on
applicants income.
*Approval of all
loans is subsequent
to meeting all
underwriting
criteria stated in the
General
Guidelines.
E L I G I B L E A P P L I C A N T S
Public school teachers and credential staff, employed full time at a K-12 school located within
the City of San José or at a public school where 50% or more of the students are San José residents.
(e.g. Rosemary, Castlemont, Westmont High, Prospect High, and Alta Vista)
P R O G R A M C R I T E R I A
• A teacher or credentialed staff member must hold one of the following California credentials –
Emergency Credential, Intern Credential, Preliminary, Permanent, Life, or Professional Cleared
Credential in the following:
For Teachers:
Single Services, General Secondary, Physically Handicapped, Multiple Subject, Standard
Secondary, Severely Handicapped, General Elementary, Learning Handicapped, Clinical
Rehabilitative Services, Standard Elementary, Education Specialist (e.g. Deaf, Visually Impaired)
For Staff Members:
School Nurse Credential, Clinical or Rehabilitation Service Credential, Pupil Personal
Services Credential- (e.g. School Counseling, School Social Work, School Psychology,
Child Welfare and Attendance) Library Media Teacher Service Credential, Designated
Subjects Vocational Education Teaching Credential
For Administrators:
Administrative Service Credential, General Secondary School Administration Credential,
Administration Services Credential (Examination), General Secondary School Supervision
Credential, Standard Supervision Credential, General Administration Credential, Standard
Administration Credential, General Supervision Credential, General Elementary School
Administration Credential, The Supervision Credential, General Elementary School
Supervision Credential, General School Principal or Supervision Credential
• Currently does not own a home as a primary residence
• Have a household gross income that does not exceed 120% of median income for Santa Clara
County, adjusted for family size. Please refer to the Santa Clara County Eligibility Criteria
sheet for the eligible income levels.
• City-assisted households generally may not purchase a larger home than is actually required to
meet the needs of the household. Maximum unit size is calculated at total household size plus
one bedroom. For example, a minimum household size of two persons is eligible to purchase a
three-bedroom home and a three person household is required to purchase a four bedroom home.
• A property inspection by a City Housing Inspector may be required and the home must
meet Housing Quality Standards as defined by the Housing Department and comply with the
City’s local, state and federal building codes. In addition, the Department may conduct a lead
based paint test for properties built prior to 1978. If the home contains chipping lead based
paint or does not meet the local building code, the property will not be eligible.
• Completion of a HUD certified homebuyer education program is required prior to loan approval.
You must obtain your homebuyer education from one of these organizations: Neighborhood
Housing Services Silicon Valley (NHSSV) - 408.279.2600, Association of Community
Organizations for Reform Now (ACORN) - 408.297.3053, Project Sentinal - 408.720.9888,
or Consumer Credit Counseling Service (CCCS) - 800.540.2227. Applicants will be required
to submit a certificate of completion as a part of their loan application. Classes offered through
individual lenders or online providers are not eligible.
p
T E A C H E R H O M E B U Y E R P R O G R A M
• Have a minimum credit score of 600 (this also applies to co-borrowers)
• Comply with the City's Underwriting Guidelines. The Guidelines can be viewed from
www.sjhousing.org/program/HB/Underwriting.pdf
E L I G I B L E P R O P E R T I E S
Owner-occupied, single-family detached homes, townhomes, mobilehomes and condominiums
located within the City of San José municipal boundaries.
The maximum home purchase price is $712,500. In addition, your total monthly housing cost
cannot exceed the "Affordable Housing Cost" limit as shown on the Eligibility Criteria sheet. Total
monthly housing expenses include: loan principal and interest payment, property taxes, insurance,
homeowner association dues, utilities (other than phone), maintenance, and repair.
L O A N L I M I T S
The maximum THP loan amount is $35,000 and $50,000 depending on teacher income and total
monthly housing payment.
L O A N T E R M S
The THP is a deferred repayment loan, due and payable in 45 years or upon transfer of the title.
A M O U N T R E Q U I R E D F O R D OWN PAY M E N T / C L O S I N G C O S T S
Generally the lender closing costs will require an estimated 3% of the purchase price for
either a down-payment or closing cost. Payment of closing costs by the seller is acceptable to the City.
S E C U R I T Y F O R T H E T H P L O A N
The borrower will be required to execute an affordability restriction and a promissory note,
secured by a recorded deed of trust.
A P P R O V E D L E N D E R S
The City leverages its loan funds with those provided by private lenders. For a list of
participating lenders, visit our website at www.sjhousing.org/program/HB/LenderList.pdf or
call the phone number listed below.
A P P L I C AT I O N P R O C E S S
The THP application is included as part of the loan package that the mortgage lender, selected by
the teacher, submits to the City for approval. The Housing Department reviews and processes the
application package. Following the commitment of THP funds, loan documents are prepared by
the City and the other lender(s) to complete the loan closing.
A F F O R D A B I L I T Y R E S T R I C T I O N S
The property will be subject to a 45-year affordability restriction. The restriction requires either:
1. The property be sold only to an income-qualified household at an affordable price, or
2. The City and the borrower share any net increase in equity that accrues between the
date of the original purchase and the date of sale. If the teacher prepays the THP loan
and remains the homeowner, the affordability restriction will remain in effect.
F o r a d d i t i o n a l i n f o r m a t i o n a n d a p p l i c a t i o n f o r m s , v i s i w w w. s j h o u s i n g . o r g o r
c o n t a c t t h e T e a c h e r H o m e b u y e r s t a f f a t :
City of San José - Housing, Homebuyer Programs
200 East Santa Clara Street, San José, CA 95113
Phone 408.975.4468
Fax 408.998.3183
korey.richardson@sanjoseca.gov 2.09
jThe Teacher and Credentialed Staff Homebuyer Program (THP) is an integral part of the
City's effort to make San José California's most educator-friendly city. The goal of the program
is to attract and retain public school teachers and credentialed staff to provide quality
education for San José youth. To achieve this goal, the THP offers a deferred-payment loan
of $35,000 or $50,000, depending on the applicants income.
E L I G I B L E A P P L I C A N T S
1. Who qualifies for the program?
A teacher or credentialed staff member who:
• is employed full-time at a public K-12 school located within the City of San José municipal boundaries
or who teaches at a public school where 50% or more of students are San José residents (e.g.
Rosemary, Castlemont, Westmont High, Prospect High, and Alta Vista)
• holds one of the following California credentials:
Emergency Credential, Intern Credential, Preliminary, Permanent, Life or Professional Cleared Credential
in one of the following categories:
For teachers: Single Services, Standard Elementary, Multiple Subject, General Elementary
Severely Handicapped, Standard Secondary, Learning Handicapped, General Secondary, Clinical
Rehabilitative Services, Education Specialist (e.g. Deaf, Visually Impaired), Physically Handicapped
For Staff Members: School Nurse Credential, Clinical or Rehabilitation Service Credential, Pupil
Personal Services Credential - (e.g. School Counseling, School Social Work, School Psychology, Child
Welfare and Attendance), Library Media Teacher Service Credential, Designated Subjects Vocational
Education Teaching Credential
For Administrators: Administrative Service Credential, General Secondary School Administration
Credential, Administration Services Credential (Examination) General Secondary School Supervision
Credential, Standard Supervision Credential, General Administration Credential, Standard Administration
Credential, General Supervision Credential, General Elementary School Administration Credential,
The Supervision Credential, General Elementary School Supervision Credential, General School
Principal or Supervision Credential
• has a household gross income that does not exceed 120% of median income for Santa Clara County, adjusted
for family size. Please refer to the Santa Clara County Eligibility Criteria sheet for the eligible income levels.
• does not currently own a primary residence
• have a minimum credit score rating of 600 (this also applies to co-borrowers)
• complies with the City's Underwriting Guidelines. The Guidelines can be viewed from
www.sjhousing.org/program/HB/Underwriting.pdf
Teacher and Credentialed Staff Homebuyer Program
QUESTIONS AND ANSWERS
2. Is the Program open to other professionals who may hold a teaching credential but who are not fulltime
K-12 teachers (e.g. school nurses, counselors)?
Yes, the homebuyer program was expanded as of November 18, 2008 to include credentialed staff and administrators.
3. I already own a home. Can the program help me buy another home?
No, not if you are currently living in your home and it is your principal residence.
E L I G I B I L I T Y O F P R O P E R T I E S
1. Where does the home I buy have to be located?
The home must be located within the City of San José municipal boundaries. It cannot be located within a
"county pocket" even if the property has a San José address.
2. What type of home can I buy?
The THP loan can be used to purchase a single-family detached home, a townhome, or a condominium. The City
offers up to $15,000 towards the purchase of a mobilehome.
3. What is the maximum allowable home purchase price?
The current maximum purchase price is $712,500. Your monthly housing cost cannot exceed the "Affordable Housing
Cost" limit. The Affordable Housing Cost limit is the maximum allowable monthly housing cost applicable to your
property as shown on the Eligibility Criteria sheet. Monthly costs include: loan principal and interest payments,
property taxes, insurance, homeowner association dues, utilities (other than phone), maintenance, and repair.
F I N A N C I A L T E R M S
1. How large of a City loan can I qualify for?
The maximum City loan is $35,000 and $50,000 depending on your income. The Housing Department may
approve a lower amount, based upon your housing-to-income ratio and the amount of liquid assets that will be
available after the close of escrow.
2. What are the City loan repayment terms?
The THP loan is due and payable in 45 years, or upon sale or transfer of the property, whichever occurs first.
3. How much of my own money will be needed to buy the home?
Generally, you will need 3% of the purchase price for either downpayment or closing costs. Zero-percent
downpayment programs are acceptable if approved by the senior lender. Adding a downpayment from personal
funds or from assistance programs will increase your purchasing power or decrease your monthly mortgage
payment. Payment of the closing costs by the seller is acceptable to the City.
4. To help buy my home, may I combine the City's program with other assistance?
Yes! The City encourages teachers to combine programs. The City of San José has prepared a First Time Homebuyer's
Quick Reference Guide to assist you in locating additional assistance programs. The Guide can be view from
www.sjhousing.org/program/HB/QuickRef.pdf.
5. Can I refinance the non-City loans?
Yes, if the Housing Departments gives advance approval. The amount refinanced cannot exceed 90% of the
combined loan-to-value.
6. If I am no longer working at a San José public school during the City loan term, do I have to
immediately repay the loan?
No, the City loan only needs to be repaid in 45 years or upon transfer of title to the home.
7. If I need to move, can I rent out the home?
With prior written consent, the City may allow a temporary rental period of up to 60 days. Approval must be obtained
by the City’s Loan Management Division. If the home is not continuously occupied by the owner, except as provided
above, repayment of the City loan will be required.
A F F O R D A B I L I T Y R E S T R I C T I O N S
1. Are there affordability restrictions?
Yes, you are subject to a 45-year affordability restriction that is recorded against the property. If you want to resell
before this term is up, you must first notify the Housing Department. You have two resale choices:
• You may sell to another person who earns less than 120% of Area Median income. Documents certifying
the income of the new buyer will be verified and reviewed by City staff. The new buyer must be willing and
able to accept the City’s affordability restrictions and assume the existing City loan (provided that the loan
documents allow for an assumption) and the resale price for the unit will be restricted to an Affordable
Housing Cost Limit. If the above conditions are met, you will not be required to pay the City an “equity
share.” Please call the City’s Loan Management Division at 408.975.4428 to review your loan terms prior
to selling your home.
• You may sell the unit at fair market value, repay the City loan, and pay the City an “equity share.” The
equity share is the City’s proportionate share of the difference between the original purchase price and the
resale price (less City approved selling costs and improvements). Note: In most cases, prepayment of your
City loan while you continue to own your home will not remove the affordability restrictions from your residence.
Please call the City’s Loan Management Division at 408.975.4428 to review your specific loan terms
prior to selling your home.
Note: In the event the resale price is less than your than your original purchase price, no equity-share will be
due to the City. However, you will be required to repay the original City loan amount.
2. How does the equity share provision work?
The equity share is the City's proportionate share of the difference between the original purchase price and the
resale price (less City approved selling costs and improvements). This share is the ratio of the City loan amount
to the original purchase price. Below is an example which illustrates the calculation of the equity share formula.
Equity-share example:
Possible resale price $600,000
Original sales price 400,000
Accrued equity $200,000
Less reasonable capital improvements approved by City $ 2,000
Less reselling costs 40,000
Equity subject to sharing ($200,000 - $42,000) $158,000
City equity-share percentage ($35,000 / $400,000) 8.75%
Equity-share due to the City ($158,000 X 8.75%) $13,825
Original purchase price $400,000
City loan $ 35,000
Original first loan amount $365,000
Property Resale example:
Possible Resale price $600,000
Repayment of first loan $365,000
Repayment of City loan $ 35,000
Payment of equity-share $ 13,825
Reselling costs $ 40,000
Amount due to homeowner $146,175
T H E P R O C E S S
1. Which lender can I use?
You may use any lender of your choosing. As a courtesy, the Housing Department maintains a list of active program
lenders. The List of Lenders can be viewed from www.sjhousing.org/program/HB/LenderList.pdf.
2. I want to make an offer on a home. How rapidly can I receive the City funds to pay for the home?
The City loan approval normally occurs within eight working days after receipt of a complete City loan application
from your selected lender. Funding can occur within 11 days, subject to any conditions identified in the City's
loan approval. Be sure to note the "pending approval of financing" in any offer that you may make, to protect you
from loss of a deposit on an offer.
3. The program sounds great! What are the next steps?
• Completion of a HUD certified homebuyer education program is required prior to loan approval. You
must obtain your homebuyer education from one of these organizations:
Neighborhood Housing Services Silicon Valley (NHSSV) - 408.279.2600
Association of Community Organizations for Reform Now (ACORN) - 408.297.3053
Project Sentinal - 408.720.9888
Consumer Credit Counseling Service (CCCS) - 800.540.2227
Applicants will be required to submit a certificate of completion as a part of their loan application.
Classes offered through individual lenders or online providers are not eligible.
• Contact a lender to become pre-approved for a 1st mortgage loan. Your lender will ask you to sign the
City application (www.sjhousing.org/program/HB/LoanApp.pdf) and will forward to the City of
San José at a later date. Your lender forward these items to the City of San José at a later date.
• Work with the real estate agent of your choice to assist you in the search for your new home. NHSSV can
provide this service, if you have not already selected a real estate agent. Your lender will send the completed
THP loan application to the City’s Housing Department.
• Get final loan approvals from your lender.
• Sign the loan documents.
Move in and enjoy your new home!
For additional information contact the Homebuyer staff at: www.sjhousing.org/program/thp.html or contact the
Homebuyer staff at:
City of San José - Housing
Homebuyer Programs
200 East Santa Clara Street
San José, CA 95113
Phone 408.975.4468
Fax 408.998.3183
E-mail korey.richardson@sanjoseca.gov
To request an accommodation or alternative format for City-sponsored meetings, events or printed materials, please contact the Housing Department
at 408.535.3860 or 408.294.9337 (TTY) as soon as possible, but at least three business days before the meeting/event.
7.10
E L I G I B I L I T Y
Criteria h D E P A R T M E N T o f H O U S I N G
Annual Income limits for Santa Clara County based on a median income of $103,500 for a family of
four, as of June 17, 2010.
The income limits listed below per household size represents the maximum amount of household income
allowable for assistance for each level. Household size includes all members living in the home.
Income Level Household Size
1 2 3 4 5 6 7 8
Extremely Low $21,750 24,850 27,950 31,050 33,550 36,050 38,550 41,000
Very Low $36,250 41,400 46,600 51,750 55,900 60,050 64,200 68,350
Low $56,500 64,600 72,650 80,700 87,200 93,650 100,100 106,550
THP (90%)* $65,205 74,520 83,880 93,150 100,620 108,045 115,515 122,850
Median $72,450 82,800 93,150 103,500 111,800 120,050 128,350 136,500
Moderate** $86,950 99,350 111,800 124,200 134,150 144,050 154,000 163,950
NOTE: Eligibility criteria is subject to change annually.
Affordable Housing Cost Limits for Homebuyer Programs
Affordable Housing Cost Limits are the maximum housing
costs allowed based on program guidelines. Housing costs
include loan principal and interest payments, property
taxes, insurance, homeowner association dues, utilities (other
than phone), and maintenance and repair.
(http://www.sjhousing.org/program/HB/AHCL_worksheet.
pdf)
Total monthly expenses cannot exceed the
following Affordable Housing Cost Limits:
*Maximum household income to qualify for the $50,000 San José Teacher Homebuyer Program (THP) loan.
**Maximum household income to qualify for the $35,000 THP loan. 7.10