City to Help Renters Buy Condos : Housing: Municipal employees and families with moderate incomes may qualify for interest-free assistance to get into the new 16-unit complex.

The Housing Authority on Tuesday gave preliminary approval to a new plan to help moderate-income families buy their first homes in Glendale.

Under the plan, city employees and residents with annual incomes of up to $52,200 could qualify for interest-free city loans toward the purchase of $180,000 condominiums in a project to be built at 423-427 W. Doran St.

A city loan of $35,000 and a developer discount of $10,000 will be offered on units in a 16-condominium project to be sold under the plan. Buyers would be required make a $27,000 down payment, or 20% of the net purchase price of $135,000. The city loan would not have to be repaid until the unit is resold.

City council members for years have talked about ways to invest housing subsidies to increase home ownership rather than just supplementing rent payments. Under a strategy adopted in January, the city pledged to help make first homes more affordable, particularly for city workers who cannot otherwise afford to buy in Glendale.

Now, more than two-thirds of city workers reside outside Glendale, including some who live far away, officials said. In the event of an earthquake or other major disaster, many of those employees might not be able to get to work to provide emergency services. City officials have been working on ways to bring employees closer to work.

Under the plan by the Housing Authority, which consists of the five City Council members and two community representatives, the city will pay $560,000 toward construction of the $2.5-million, 16-unit condominium development.

The city would hold a second trust deed on each of the units and regain its investment when the units are resold at the market rate, said Madalyn Blake, director of community development and housing.

Although details are still to be worked out, officials said they plan to restrict a percentage of the units to city employees. The remainder would have to be sold to renters who live in Glendale.

Those eligible typically would be three- to four-person families with annual household incomes of $47,000 to $52,200. A higher income would be permitted for larger families, although units in the development will be relatively small, from 1,150 to 1,250 square feet with two bedrooms and two baths.

The monthly cost of the mortgage payment, property taxes and homeowner fees is estimated at $1,286. The city money would be interest-free, with no monthly payment. The city would receive all of the equity if the unit is resold within five years, while the buyer would get only his investment. After the first five years, the city and the homeowner would share profits.

The plan is designed to return the city’s investment at a profit, which could be put into other new developments for first-time home buyers.

Property owners Roland Sarlot and Pete Rhein proposed the plan. They offered to discount each unit by $10,000 because they will be allowed to build three more units than normally permitted on the site, which is zoned for medium-density development. The project is expected to be completed in about two years.