Glendale : Home Loan Plan Approved
The Glendale Housing Authority on Tuesday approved final details of a plan to provide payment-free, second trust deed loans of up to $50,000 for the first-time purchase of a home by about 20 moderate-income renters who live or work in the city.
The authority in August set aside $500,000 in redevelopment funds for the program, but asked that city staff members specify details. The program is the first of its kind to be implemented in the county and one of only a few recently launched in the state, according to housing industry officials.
Under the plan approved this week, renters with a maximum yearly income of $57,950 for a family of four or $46,350 for a family of two can qualify if they have enough cash for at least a 7% down payment on the purchase of a home or condominium.
The city will provide a second trust deed loan for up to 20% of the cost of a home--a maximum of $25,000 for a condominium, or $35,000 for a single-family house. An additional $15,000 could be borrowed to make repairs to an older house or condominium to bring it up to city code standards, said Madalyn Blake, director of community development and housing.
The maximum purchase price of property was set at $250,000 for a house and $200,000 for a condominium unit, although Blake said the typical price is expected to be in the range of $180,000.
City officials originally had proposed offering the loans interest-free, with the city to share in the profits on the eventual resale of a home. However, Blake said that condition was rejected by federal banking authorities.
Instead, the city will earn interest at the same rate as a first trust deed provided by a commercial lender, but no payments on the principal and interest will be required on the city’s portion until sale of the property.
Therefore, the total monthly housing cost--expected to range from $1,300 to $1,500 for the mortgage payment, association fees, taxes, insurance and utilities--will be affordable to more moderate-income purchasers. Authority members emphasized that at least 15% of the city’s allocation for down payments be set aside for use by city employees--particularly police and fire personnel--who currently live outside of the city. Officials are concerned that more than two-thirds of safety workers live far away and would be unable to respond in the event of a major disaster.
Housing officials said about 150 potential buyers have signed up for the program since it was announced in August. Actual selection of candidates is expected to begin in a few months after financing details are worked out with potential commercial lenders.
