25. Teacher housing assistance
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COMMUNITY DEVELOPMENT DEPARTMENT
CUPERTINO
CITY HALL
10300 TORRE AVENUE. CUPERTINO, CA 95014-3255
(408) 777-3308 · FAX (408) 777-3333
Summary
Agenda Item No. as
Meeting Date: December 18. 2007
Subject.:
Consider amending or dissolving the teacher housing assistance program and utilizing the funds for
other affordable housing developments.
Recommendation:
The Cupertino Housing Commission recommends Council explore the followjng:
. Option 1: Dissolve the program an9- utilize the funds for other projects, such as Cleo Avenue,
Stevens Creek Village II, Maitri transitional shelter for battered women or a future Rotary
development.
. .Option 2: Increase the loan amount to $100,000, while keeping the boundaries the same. This
would lower the number of loans to two.
. Option 3: Expand the boundaries and allow teachers to purchase homes in neighboring
communities where home prices are more affordable. For example, an MLS search for homes
under $600,000 in Cupertino has consistently shown less than five units. However, a similar
search for the San Jose area surrounding Cupertino shows at least fifteen units. Many of these
homes are priced below $400,000.
Another advantage to this approach would be the. opportunity for teachers to tap into multiple
housing programs. Potentially, a Cupertino Union School District employee could benefit from
the San Jose Teacher Homebuyer program and the Cupertino Teacher Housing Assistance
Program. Leveraging multiple sources is often necessary to make home purchase possible.
Background:
At the January 2003 goal setting session, City Council members expressed interest in develop.ing a
teacher housing program to serve Cupertino teachers. In February 2003, the City Council directed the
Housing Commission to develop guidelines for the program and recommend a non-profit agency to
administer the program. A budget of $220,000 was allocated to this project, with $20,000 being used for
a contract with a non-profit agency for program administration.
The Commission met to discuss the program on April 3, 2003. The guidelines that they developed for
the program can be found in Attachment A. These guidelines were modified by the City Council in
March 2005 in response to poor interest in the program. The number of loans was dropped from four to
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Consider amending or dissolving the teacher housing assistance program and utilizing the funds for other affordable housing developments.
December 18, 2007 Page 2 of 2
three with the loan amount being increased from $50,000 to $66,600. Neighborhood Housing Services
Silicon Valley (NHSSV), the program administrators, has expressed concern that the loan increase was
not enough to generate interest in the program.
ill February 2007, the Housing Commission met again to discuss program alternatIves. The Commission
recommended the Council consider one of the three options listed in the recommendation section of this
report.
Program Impediments:
In December 2003, the school districts distributed flyers highlighting the program. Teachers were given
until January 31,2004 to apply for the program. In early February 2004, staff removed the deadline and
had the school districts redistribute the flyers. Although NHSSV received many phone calls regarding
the program, only four applications for the program were received. Of the four applicants, none have
found a Cupertino property to acquire.
NHSSV believes that applicants are unable to take advantage of the program because of the Cupertino
city limit restriction and the required 5% down payment. Homes in the Cupertino real estate market are
higher than neighboring cities, making them unaffordable for teachers. Attachment B was prepared by
NHSSV to demonstrate the amount of aSsistance required by a prospective teacher interested in
purchasing a home in Cupertino.
PREPARED BY : Vera Gil, Senior Planner
APPROVED FOR SUBMITI AL:
~
Steve Piasec ., Director of
Community Development
David W. Knapp
City Manager
Attachments:
Program Guidelines
Purchase Example
H:\- TEACHER HOUSlNG\Teacher Housing Restructuring.doc
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City of Cup.ertino
Teacher Assistance Program
Program Guidelines
The City of Cupertino has mad~ up to $200,000 available to assist qualified teachers in
the Fremont High School, Cupertino Union and Foothill-De Anza Community College
Districts for the purchase of a home within the City of Cupertino corporate limits.
Neighborhood Housing Services Silicon Valley (NHSSV), the agency administering the
program for the City of Cupertino;'may be contacted at 408-279-2600 for more .
information.
Below are some program highlights:
. Maximum 10al1 amount of $50,000 per household.
. Loans are 0% interest and deferred until the change of title, refinance for cash out,
or the end of the 3D-year loan term, whichever comes first.
. Loan is subject to a 45-yea~ affordability restriction that is recorded against the
prop~rty.
. Resale restrictions will apply to the new home.
. Home to be purchased must be located within the City of Cupertino corporate limits.
. Borrowers must not own a home at the time of application.
. Borrowers must still meet the eligibility requirements of the prima.ry mortgage
lender, including having an acceptable credit history.
. Borrowers must be able to contribute at least 5% to the purchase of an eligible
home.
. Borrowers must attend NHSS\{'s 8-hour homebuyer workshop (class) in order to
participate in the program.
. Borrowers must utilize NHSSV's real estate agent for purchasing through the
program.
. Borrowers must have a household income at or below 120% of the county median
income to be eligible for the. program. Below is a chart with the income guidelines.
Household Size
1
2.
3
4
5
6
7
8
Maximum Income Limits
88,600
101,300
113,950
126,600
136,750
146,850
157,000
167,100
Prospective buyers are encouraged to submit an application for the program and complete
the homebuyer workshop prior to entering into an agreement to purchase a home or
applying for a primary loan. Applications will be accepted from February 2, 2004 through
February 27, 2004. A lottery to determine the recipients of the loans will be held in Spring
2004. Two loans will be processed in Fall 2004 and two in Summer 2004.
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Neighborhood Housing Services Silicon Valley
Purchase Example
Comments
;,':;'qMijfyiit9N(iti{~~ ..;'. 5.625 %
Term . '30' YR
.7% Simple Interest Deferre4 '.
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:.;. -; :i. -:'\ ';1:::'/~'~':':;~ '
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.....:..;::._~~.,~I~~I~;n~~~t9~~err~~,..,~... .
. .. '. .
. . '..'
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. . Equity Share .
. 3%.SlrnJ)lelntel'eSfDefeite<l ~'.>
Note Rate
: Zero %3q Yeai' loan ~
LOin to Grant Program
%
7.00 YR
30
Underwriting qriteria.
hlcome .... ....
73,636
Down Payment Assistance
150,556
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