GILROY
– Teachers can no longer anticipate a sizable financial break
predicted by nonprofit developers to purchase a home in an
affordable housing development being constructed in Gilroy.
By Lori Stuenkel
GILROY – Teachers can no longer anticipate a sizable financial break predicted by nonprofit developers to purchase a home in an affordable housing development being constructed in Gilroy.
Early predictions were that as much as $112,000 could be deducted from the cost of the $440,000 homes through state, county and city funds. That number has shrunk to $25,000 from state funds and the city has yet to determine how much funding it can provide to the project.
And, a loophole in state law prevents both state and county funds to be used together.
“We weren’t able to put together the kind of teacher program we thought we were,” said Nancy Wright, senior project manager for South County Housing.
The early assistance numbers included both state and county bond money, but such double-dipping into bonds is not allowed, Wright said.
“You can use only one bond source, and that was a disappointment for us,” Wright said.
Teachers who qualify can still take advantage of a $25,000 deferred-interest loan for first-time homebuyers from the High Cost Area Home Purchase Assistance Program offered through the California Housing Finance Agency.
Construction on the 25-home development located at Church Street and Trimble Court is progressing and the first phase of three- and four-bedroom homes is expected to be partially completed by the first of the year. Twelve homes that are being marketed to teachers will be completed next year. Ten 1,477-square-foot homes are priced at $440,000 and two 1,588-square-foot homes cost around $450,000.
The city in July suggested it might contribute $30,000 in low-cost housing loans for teachers. City officials have since determined that it is legal to contribute housing funds for a specific type of person, such as teachers, and an assistance program that would provide loans to teachers, and possibly city employees or other groups, is being created, said Marilyn Roaf, housing and community development coordinator for the city.
“We are trying to make sure we have a commitment to people who are low-income and are interested in becoming homeowners,” Roaf said.
No final decisions have been made as to how much the city will contribute from its housing trust fund or how it will do so. City Council could vote on a proposal next month, Roaf said.
Efforts to identify more funding sources for teachers will continue, Wright said. South County Housing staff have “gone down the list” of potential assistance programs. Some, such as the county program and the state’s Extra Credit Teacher Program (which provides teachers at low-performing schools with low-interest home loans) constitute double-dipping.
“Some of them aren’t funded, either, they’re there on paper but they’re not funded,” Wright said.
It is possible there are assistance programs out there.
“If there are, we’re going to find them,” Wright said. “I hope we can still serve the teachers.”
GUSD teachers share that hope.
“As of now, even with the maximum loan we could possibly get, we don’t make enough to get a loan to cover the cost of the house,” said Mandy Reedy, a second-grade teacher at Rod Kelley Elementary School. Reedy’s husband Sean teaches at South Valley Middle School.
The Reedys have already viewed the house layout plans, decided they like the neighborhood and even chose the lot they want.
“We both moved here, and we love it and we really, really want to stay,” Reedy said. The couple began their teaching careers in Gilroy three years ago. They live in a country apartment and have long desired to purchase a house.
“This is the one thing that got us excited about buying a house in the first place,” Reedy said of the La Maestra development and the predicted financial assistance.
When the Reedys first looked into purchasing a La Maestra home, they found they would have to earn $77,000 a year to make a purchase if they received the $25,000 California Housing Finance Agency loan, a county loan and made a $22,000 down payment. They earn just a little more than that, Reedy said, but now the county money is unavailable.
“If the city money doesn’t come through, we might not be able to afford the house,” she said. “We might have to leave (Gilroy) to buy a house.”
Two beginning teachers in Gilroy Unified School District would earn $76,000.
The Reedys are currently the only teachers applying for a La Maestra home. All other teachers at an interest meeting in August were single and would not be able to afford the house, Reedy said. If more funding becomes available through the city or other programs, she thinks more teachers would respond.
“There are other teachers I know who would be extremely interested in it,” Reedy said.
South County Housing will open the sale of homes at La Maestra – which means “teacher” – to the general public, although it will continue to market the homes to teachers.
