Teacher Homebuyer Program

ISSUE AREA: PAYING FOR IT

City: San José, CA
Housing - Workforce Development - Urban

Contact:
Korey Richardson
City of San José- Department of Housing
4 North Second Street, Ste. 1350
San Jose, CA 95113
(408) 277-8486
korey.richardson@sanjoseca.gov

Date Published: October 2006

The Teacher Homebuyer Program, run by the San José Department of Housing in conjunction with San José Public Schools, is a program that seeks to attract and retain talented teachers in the San José Public School system by offering them deferred repayment homeownership loans. Like many cities across the country, San José has had difficulty securing sufficient amounts of teachers and other professionals such as police and firefighters. In addition, the high cost of housing in San José provided another deterrent from attracting teachers to the San José Public Schools. The Teacher Homebuyer program was started in 1999 through the mayor’s administration, which hoped to enhance a quality school system and become the most teacher- friendly city in California by offering teachers access to affordable homes. The program is also based upon the belief that the school system will be stronger by having teachers who are members of the communities in which they work.

The Teacher Homebuyer Program is open to all full-time teachers, grades K-12, in the San José Public School system whose gross income does not exceed certain limits. Loans can range from up to $25,000 or $40,000 dollars depending on the teacher’s household income level, and the purchase price of the home cannot exceed $550,000 for new homes, or $486,400 for existing homes. Homes purchased must be within the City of San José municipal borders in order for teachers to be eligible for a loan. Since 1999, the Teacher Homebuyer program has lent nearly $15 million dollars to about 400 teacher homebuyers. The program is founded upon the belief that teachers who have access to affordable housing will continue to work and to make valuable contributions within the San Jose Public School system. Only one of the teachers who participated in the program has left San José.

The loans are zero percent interest, and payment of the loan is due only upon re-sale of the home, or after 30 years. When teachers wish to sell the property, they can either sell it to someone whose income is below 120% of the city’s median income at a restricted price based upon the Affordable Housing Cost limit, or they can sell it for market value, and pay the city an equity share based on the difference between the original purchase price and the resale price of the home.

The loans for the Teacher Homebuyer Program are provided by the City of San Jose using local redevelopment tax revenues. The San José Housing Department also uses loan and tax credit programs from agencies such as the California Housing Finance Agency’s Health Insurance Counseling and Advocacy (HiCAP) Program and Teacher Extra-Credit Programs, Housing Trust of Santa Clara County, and Fannie Mae and Freddie Mac home loan programs to support the program. The Teacher Homebuyer Program applied to the California Housing Finance Agency (CalHFA), Fannie Mae and Freddie Mac to have the program approved. These partnerships allow the program to assist as many teachers as possible while providing the least amount of subsidy. The city has also paired with realtors and developers to market new affordable homes to teachers.

Resources:

www.sjhousing.org/program/thp.html