With housing prices continuing to climb in the region, many first-time buyers have had a hard time breaking into the Santa Cruz real estate market. To help alleviate some of the financial pressures these buyers are facing in the Silicon Valley , Housing Trust Silicon Valley is helping home buyers with a new Homebuyer Empowerment Loan Program (H.E.L.P.), which will become available to help households with incomes that are up to 140% of the area's median income to buy a market-rate home.
Here’s everything you need to know about the latest loan program for first-time home buyers in Silicon Valley.
Funding Assistance For Your First Home in Silicon Valley
The Homebuyer Empowerment Loan Program will assist middle-income earners looking to buy their first home in Silicon Valley with down payment assistance of up to 10% of the purchase price, with a maximum purchase price of $800k.
H.E.L.P. is a 30-year deferred loan plus a share of appreciation. Borrowers will have to repay the principal loan amount plus a share of the appreciation based on the percentage of the loan borrowed through the program. The benefit? There's no monthly principal or interest payments on the loan! Payment of the loan will be deferred until the maturity date is reached, you sell the home, or refinance the first mortgage. The H.E.L.P. market area is currently exclusive to Santa Clara County and the San Mateo County cities of East Palo Alto and Menlo Park.
Although the program doesn't currently serve Santa Cruz, there's hope that if the program proves successful, local governments and housing authorities may be inclined to offer something similar for our area, too.
H.E.L.P. Quick Facts
- The Maximum loan amount is up to 10% of the purchase price
- Interest Rate – Share of Appreciation
- Term/Maturity Date – 30 Years
- Monthly Payments – Deferred
- First-time buyer status is required
- 8-hour homebuyer education class is required
- Maximum gross household income limit- Up to 140% of area median income
- Minimum credit score- 680Asset limits-$125,000
- HSV Pre-Approval Required is required
- Maximum Purchase Price of Home is $800k
- Owner occupancy is required
- 30 Year Fully Amortized Fixed Rate Mortgage Only- No Adjustable Rate or Interest Only Mortgages Allowed
- Minimum/maximum loan to value is 70%/87%
- Combined loan to value cannot exceed 97%
We Love Helping First-Time Homebuyers
If you are ready to buy your first property in the Silicon Valley, Lauren Spencer can help you get started on your home buying journey. Check out this blog post about the most affordable neighborhoods to buy a home, and read more about our comprehensive first-time home buyer’s guide first-time home buyer's guide and our home buyer resources library. We have extensive knowledge in all fects of the Santa Cruz County real estate market, as well as a solid financing tips for the purchase of your home.