email@example.com | Nov 23, 2017 | 0
Teachers could receive up to $15,000 in down payment help
By Ron Trujillofirstname.lastname@example.org
California’s committed and hardworking teachers and other public school employees could receive thousands of dollars in down payment assistance for their first home.
The California Housing Finance Agency (CalHFA) has expanded its Extra Credit Teacher Home Purchase Program (ECTP), allowing more kindergarten-through-12th grade public school employees – including administrators and support staff, such as aides, bus drivers, food service workers and janitors – to receive as much as $15,000 in down payment assistance. Employees at public charter schools, school district offices and county continuation schools are also eligible for the program.
The additional dollars will help open the door to homeownership for many educators, who – like many others – are dealing with a critical housing affordability issue in the state.
“California teachers are committed to helping our students succeed, and we are just as focused on helping them become homeowners to build a solid foundation for their futures,” said CalHFA Executive Director Tia Boatman Patterson. “Unfortunately, few teachers, especially those at the beginning of their careers, can afford to buy a home in the state. The Extra Credit Teacher Home Purchase Program helps with the down payment and opens the door for more teachers to become homeowners.”
Less than one of every three families was able to buy the median-priced home of $516,000 in the state during the second quarter, according to the California Association of Realtors. And those who can buy a home need to earn at least $101,000 annually to make the monthly payments – even with a 20% down payment.
The pay-purchase gap is huge for many teachers in the state, especially in the Bay Area and Southern California. The average starting salary for an elementary school teacher is less than $42,000 per year. The average annual salary for all public school teachers is $69,000, according to industry reports.
The program “provides a vitally important service to the dedicated school employees who serve our students each and every day,” says Chris Ungar, president of the California School Boards Association. “By helping these public servants obtain an important piece of the American Dream, homeownership, we are addressing one of the major contributors to attrition from the profession and stabilizing schools and communities in the process.”
Under the program, public school employees in the state’s 35 high-cost counties could qualify for a maximum of $15,000 o 3% of the sales price or appraised value, whichever is greater. ECTP benefits educators who buy homes of less than $500,000.
In lower-cost counties, educators could qualify for up to $7,500 or 3% of the sales price or appraised value, whichever is greater. The program helps teachers who buy homes for less than $250,000, possible in some of the inland and rural counties of Central and Northern California.
“By helping these public servants obtain an important piece of the American Dream, homeownership, we are addressing one of the major contributors to attrition from the profession and stabilizing schools and communities in the process.” Chris Ungar, president of the California School Boards Association
Now, educators must meet county-by-county income limits for the program, which are based on the number of people living in the home. For example, the income limits for a family of four are $90,700 in Los Angeles, $144,200 in San Francisco County and $106,500 in Sacramento County.
The ECTP down payment assistance is in the form of a junior loan. Homeowners must pay back the loan when the home is refinanced, sold or the mortgage is paid off.
ECTP can be combined with other CalHFA down payment assistance programs, further increasing the down payment – and lowering the monthly payments. ECTP can be combined with a zero-interest down payment program (ZIP) offered through CalHFA’s CalPLUS programs, an FHA first mortgage with a fixed interest rate.
Photos courtesy of the artists of Unsplashed and U.S. Department of Education via @Flickr.