City planning to help out home buyers
There may be help on the way for first-time home buyers in South Lake Tahoe.
The city of South Lake Tahoe is requesting $315,000 from the state Home Investment Partnership Program, a grant that would help first-time home buyers lower their monthly mortgage payments.
According to Patrick Conway, the city’s housing and economic development coordinator, the program works as a silent second mortgage.
“(The home buyers) would go to their lender and get as much financing as they can and then the city comes in with a second mortgage,” Conway said. “It’s a deferred payment loan with 3-percent interest and only paid after 30 years or when there is a transfer of property.”
If sold to another qualifying first-time home buyer, however, the funds would stay with the property. Any appreciation of property would be divided by percentage of investment between the seller and the city.
Conway said the program plays a role in the redevelopment process by replacing low-income housing that is being displaced for the construction of new buildings.
“We operated a similar program from 1995 through 1997 and it was fairly successful,” he said. “So far, only one person who participated in that program has sold his home and it was to another first-time buyer so the money stayed with the property.”
To qualify for the program, first-time home buyers must earn less than 80 percent of the median income – an approximated $48,000 per year for a family of four.
“We should know by Jan. 30 if the city gets the grant,” he said. “If everything goes through, we’ll start gearing up for the program in the spring by taking applications.”
At a cap of $40,000 available per home buyer, Conway said the program could be available to as many as 11 home buyers.
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