Expert Contributor
Keeping our Kids in California By Janice Jordan, Compass Realty, Resident since 1998
M
Y KID JUST GRADUATED FROM COLLEGE. THEY GET A JOB OFFER IN THE BAY AREA WITH A GREAT SALARY. WILL THEY EVER BE ABLE TO AFFORD A HOME? As parents and graduating college students, we all know the plight of staying in the Bay Area to live and work. Yes, the salaries are great, but proportionally, the rents you pay are very high. According to a recent news article, the average rent for a 1 bedroom in San Francisco is $3788 per month. Even with a starting salary of $85,000, this doesn’t leave much discretionary spending money after paying for utilities, parking, cell phone and other necessities. The demand is still greater than the supply for rentals, therefore prices are not expected to decrease for rentals in the near future. Saving for the down payment is the most challenging problem for our newly employed. Saving for a home can seem a long and daunting task. Unless there are parents who can give their children ‘gift’ money, most young people will need to save at least $25,000 in order to purchase an entry level home in the immediate bay area. There are some government programs that can help.
https://www.nbcbayarea.com/news/local/south-bay/los-gatos-homeselling-for-274000/2 201389/ How many people do you know who really would like to buy a home but because of little money down or prices are too high to qualify, they stay as renters? Take advantage of what our tax dollars are subsidizing for affordable housing options. As always, call me directly if you have any questions or would like to learn more about these programs in your city. See you around town. ~Janice
City subsidized DOWN PAYMENT ASSISTANCE PROGRAMS
What programs are out there for those just starting out? Each city in the Bay Area has a Down Payment Assistance Plan. Studies show that even though our college grads are making close to $100,000 a year, they can’t save money for a down payment. This is largely due to the high rents in urban areas. Ten years ago, the average person spent about 30% of their income on rent. Today they are spending almost 50% of their income for rent. So to help with this problem, the cities are offering Down Payment Assistance of up to $150,000. These loans have no payments due while you live in the home. The loan is repaid to the city when you sell or refinance the home.
How does this work? This program is funded by the passing of Measure A. The program’s fund can provide assistance of up to 17% of the down payment for a home priced at $800,000 or less. Buyers must make no more than 120% of median income, which in Contra Costa County is $98,550 per year for a family of four. The buyer must contribute at least 3% of the down payment. Here are some links to our local area’s Down Payment Assistance Programs. https://www.danville.ca.gov/397/Housing-Information http://www.cityoflivermore.net/citygov/cdd/hhs/housing/opps.htm https://www.cityofpleasantonca.gov/resident/housing/homebuyer.asp 20
MARCH 2020
