Santa Ana May Offer Help in Buying Homes

People who want to buy their first house but have trouble scraping together a down payment may soon be able to turn to the City of Santa Ana for help.

A long-term housing strategy adopted by the City Council on Monday includes a proposed “mortgage assistance program” for first-time home buyers with low to moderate incomes.

“This is a very significant component of our housing strategy,” said Patricia C. Whitaker, city housing manager. “It encourages long-term tenancy by homeowners in downtown neighborhoods . . . where there has been a tendency to revert to renters.”

Whitaker said she thought the program would be the first of its kind in the county because, in addition to providing money for low-interest first mortgages, it would provide money for down payments. (The county and some cities have provided mortgage funds at below-market interest rates for several years.)

“The problem that we’re finding is that a lot of folks either have a problem with the down payment or a problem qualifying for a loan,” Whitaker said. “The more money you can put down (with the city’s assistance) makes it easier to qualify.”

The program will probably be targeted toward older neighborhoods where single-family houses are predominant, Whitaker said, such as Heninger Park, French Park, Eastside, Washington Square and Wilshire Square.

Details of the program have yet to be developed and must win City Council approval. But under a plan that will be considered by the city’s Redevelopment Commission today, home buyers could borrow up to $12,000 or 10% of the purchase price at an interest rate of 5% from the city and apply the money toward a down payment on an existing house or condominium in a specified area of the city.

The loans would be repayable in 11 years--with no payments during the first five years--and would be secured by a second trust deed. About $120,000 in city funds would be made available under the program--enough to help finance the purchase of 10 to 12 homes, Whitaker said--but the amount could increase if the project is successful, she said.

In addition to obtaining money for a down payment, first-time home buyers could obtain below-market-rate mortgages from the city.