California Housing Finance Agency changes educators' mortgage program

Posted at 12:11 PM, Nov 03, 2016
and last updated 2016-11-03 15:11:58-04
California Housing Finance Agency has announced changes to its Extra Credit Teacher Home Purchase Program (ECTP), allowing more K-12 public school employees-including administrators and support staff such as aides, bus drivers, food services workers and janitors-to receive as much as $15,000 in down payment assistance.
The program includes educators at public charter schools, school district offices and county continuation schools.
"Unfortunately, few teachers, especially those at the beginning of their careers, can afford to buy a home in the state. The Extra Credit Teacher Home Purchase Program helps with the down payment and opens the door for more teachers to become homeowners," said CalHFA Executive Director Tia Boatman Patterson.
Less than one-third of  families were able to buy a median-priced home of $516,000 in the state during the second quarter of 2016, according to the California Association of Realtors. And those who can purchase the median-priced home need to earn at least $101,000 to make the monthly payments - even with a 20 percent down payment.
In California, the average starting salary for an elementary school teacher is less than $42,000 per year. The average annual salary is $69,000 for all public school teachers, according to industry reports.
"By helping these public servants obtain an important piece of the American Dream, homeownership, we are addressing one of the major contributors to attrition from the profession and stabilizing schools and communities in the process," California School Boards Association (CSBA) President Chris Ungar said.
In non-high-cost counties-such as Fresno, Kern and Imperial-public school educators could qualify for up to $7,500 or 3.5 percent of the sales price or appraised value, whichever is greater. The program especially helps educators buying homes for less than $215,000, still a possibility in some of the inland counties of Central and Northern California.
The down payment assistance is in the form of a junior loan. Homeowners are not required to pay back the loan until the home is refinanced or sold, or the mortgage is paid off.
CalHFA offers additional programs that help with closing costs and can be combined with the Extra Credit Teacher Program, making homeownership even more attainable.
"We urge teachers to do their 'homework' and see how much assistance they can receive by combining our programs," said CalHFA's Boatman Patterson.