With the economy in it’s current state and the housing market seen as the culprit, you can expect that the government is focusing on stimulating housing and home buying.  As a first time home buyer you are already guaranteed an $8000 tax credit if you purchase between January first and November of 2009.

Here is a local first time home buyer program offered by the City of Santa Clara.  It is a $75,000 dollar second mortgage provided by the city towards the purchase of a home in Santa Clara.  Here are some more details below:

City of Santa Clara 1st Time Home Buyer’s Financing Program

How Does The Financing Program Work?
The Financing Program helps first time home buyers purchase a single-family house, town home, or condominium located in the City of Santa Clara.

Who Is Eligible?
People who have not owned a home in the last three years, People whose annual household income is no greater than 120% of the County’s median income (as calculated based on your household size).

What is the maximum assistance amount?
The maximum City second mortgage is $75,000.

Minimum Down Payment Requirement:
3% of the purchase price, more may be required to qualify

What Are The Terms Of The Second Mortgage?
The City’s second mortgage will be a 20-year loan structured in the following way:
For the first 5 years, the City’s loan will be zero percent interest with no payments;
Starting the sixth year through the twentieth year, the City loan converts to the interest rate of the primary loan, and monthly amortized payments of principal and interest are paid.

Is there any equity share with the city if I sell my home?

No, terms are as above.

What loan programs can I go through? Can I refinance if rates come down?

You can go through any approved conventional 30 year fixed mortgage including FHA or CALHFA for the first mortgage. Yes you can refinance as long as it’s a fixed mortgage and no cash out other than to pay off the city loan.

What kind of interest rate can I expect on the first loan?

The interest rates are market rates determined based on the first mortgage guidelines on credit scores and down payment based on program guidelines.

What is the process to get this program?

  1. Get pre-qualified to determine maximum purchase price and loan amount (apply online or request application)
  2. Provide supporting income and asset documentation
  3. Once your pre-approval letter is issued, go out and look for your home!
  4. Once you are in contract to purchase, the escrow period to close will take a normal 30 day time frame to close

Schedule of 2006 income limits-120% of median income adjusted to family size:

Household Size Maximum Income

  •  1 – $ 88,600
  •  2 – $101,300
  •  3 – $113,900
  •  4 – $126,600
  •  5 – $136,700
  •  6 – $146,900
  •  7 – $157,000

To get started download the prequal application:  santa-clara-first-time-home-buyer-prequal

Santa Clara Real Estate Guy

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