Housing News

First Time Homebuyers in Silicon Valley Get Boost

Second program goes on full swing

Forget about the property market downturn. There’s a new savior in Silicon Valley. The Housing Trust of Santa Clara County recently announced that it would actively pursue homebuyers in the Silicon Valley area who are still caught by the property crisis. The housing trust which has invested more than $32 million since 1998 is calling on buyers to avail of their affordable housing loans and grants.

In its website, the housing trust states, “The Housing Trust of Santa Clara County makes loans available to developers of affordable housing quickly, without adding to the regulatory burden created by the necessary layers of affordable housing financing. We make loans of up to $500,000 for the acquisition, predevelopment, or construction of affordable housing at below-market interest rates and work with Opportunity Fund in order to quickly and efficiently underwrite, close, and fund loans.”

And here’s a treat for first-time homebuyers. In a report by Mercury News, “The Housing Trust recently teamed up with American Home Equity Partners to provide a new down payment assistance program for buyers, the “equity share co-investment” or ESCO program. In this program, The Housing Trust will advance as much as $75,000 to first-time homebuyers. The money will be used to match a buyer’s down payment.

“Payments on the ESCO loan will not be due until 15 years later or until the house is sold or the borrower refinances. The borrower repays the loan based on the appreciation of the home in equal proportions to the amount of the original down payments. To qualify for the program, the income of a single-member household cannot exceed $103,390, or the household income of a four-member household cannot exceed $147,700.”

But what would benefit those planning to buy their homes with the HTSCC’s support? First of all, they can be assured that this lender has an affordable housing development scheme so they would face a smaller risk of defaulting on their loans.

Second, the HTSCC can effectively leverage on its financial resources in a cost-minimizing way possible since it has continuously committed to provide the needed funds to spur housing activity in Silicon Valley.

Finally, it can create other benefits that are usually overlooked by many analysts. For example, in a study by the Colorado Housing Trust Fund, it quotes the effects that affordable housing can create on female headed households, “Female-headed households who are no longer rent-burdened will have a combined total of $947,000 per year to spend on other needs. Women across all income categories and industries will garner a direct benefit of $4.5 million per year in wages earned as a result of trust fund spending.”

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