A $1.5 million state grant will knock $50,000 off the price tag
of an affordable home for about 28 local families.
A $1.5 million state grant will knock $50,000 off the price tag of an affordable home for about 28 local families.
South County Housing, a nonprofit developer of affordable homes, was one of many organizations across the state that received a total of about $100 million of state funds from housing bonds passed by voters in 2002 and 2006. But South County received the largest grant for its Harvest Park project in Gilroy.
The plans for Harvest Park situate the affordable housing development on 36 acres in north Gilroy, near Monterey Road and Cohansey Avenue. Eventually, 161 single family homes and 81 rental units will occupy the land, said Karen Saunders, senior project manager with South County Housing. Construction on the first phase of the project is scheduled to begin in 2009 and will include rental units and the 28 self-help or “sweat equity” homes that will benefit from the state grant.
Not only will the 28 families save $20,000 in return for their sweat equity hours, they’ll save an additional $50,000 thanks to the state grant. The grant money is like a deferred long-term loan, Saunders said. The families don’t have to make payments on it and pay it back if and when they sell their homes, she said.
Between the sweat equity hours and state funds, Harvest Park homeowners can buy a home for $70,000 less than the already very affordable price of many South County homes, Saunders said.
Families work off $20,000 by framing, landscaping and painting – adding the finishing touches on a home after the developer has done the heavy lifting of laying foundations and installing roofs. Those sweat equity hours take the place of a typical 5 percent down payment on a $350,000 home.
“It really creates a sense of pride of ownership,” she said. “Besides, you couldn’t find a $350,000 home in this area.”
When the median income for a family of four in Santa Clara County is $106,100 and the average Gilroy home price is $425,000, according to the Santa Clara County Association of Realtors, South County projects make homeownership possible for families who wouldn’t otherwise be able to purchase a home. Any low income family is eligible to apply, Saunders said. Low income families are those earning less than 80 percent of the county’s median income, or less than $84,880 for a family of four.
“Grants like this keep the program running,” said Saunders.
