The City of San Jose Housing Department And Housing Trust of Santa Clara County are in the final stretch to use up all of the 23 Million award given through the National Stabilization Program part two. The second round of these dollar have been earmarked for revitalization of communities affected by foreclosures and to assist homebuyers purchase a home.
Who is Involved?
The Housing Trust of Santa Clara County is responsible for the distribution and education of these funds along with the Housing department for the City of San Jose. Although the City of San Jose is driving this opportunity to targeted areas the Santa Clara County Housing Trust is charged with educating the community. Other organizations involved in this effort are Neighborhood Housing Services, www.recovery.gov and NHORA(The National Hispanic Organization of Real Estate Associates).
Whats in it For the Public?
Opportunity to not only become a homeowner but also to begin the recovery of the housing market in Santa Clara County. Economists do tend to agree that the recover of the housing market will start in the Silicon Valley primarily because of Facebook and Google’s continued growth. In fact most of Santa Clara County is dealing with a housing shortage and multiple offers for home buyers.
Who Can Qualify?
There are income limitations to qualifying for these programs among them is the Purchase Assistance Loan(PAL).
|
Maximum Income by Household Size — FY2012 |
| Household Size |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
| Income Limit |
$ 88,200 |
$ 100,800 |
$ 113,400 |
$ 126,000 |
$ 136,100 |
$ 146,150 |
$ 156,250 |
$ 166,300 |
Some of the guidelines include the following;
- You do not have to be a First-Time Homebuyer to qualify, however you must live in the home as your primary residence.
- Purchase price of home must be 1% below appraised fair market value.
- You must complete an 8 hour HUD approved Homebuyer Education class.
- Property is subject to environmental review and home inspection by the City of San Jose.
How To Get More Information?
Contact the Housing Trust Of Santa Clara County for more information http://www.housingtrustscc.org/
Class registration contact: jeanette@housingtrustscc.org
May Foreclosure data didn’t show much of a difference other than the continued climb to a one year average from the time of a default to sale date. This trent continues to show evidence that foreclosure modification efforts and short sales are allowing homeowners more time to help them stay in their homes.
Foreclosure inventories stayed steady with little change to the amount of people who defaulted on their loans(green) and even less sale activity(blue). This is the first month that showed 0% activity in REO inventory levels(red).
Notice of sales increased(blue) while people who received a notice of default fell slightly(green).
Cancellations fell last month reducing the amount of foreclosure postponements for people currently in default(grey). Postponements(cancellations) are a good indicator of modification and short sale activity. The number of properties going back to the banks as a result of a sale increased slightly(red).
The average time a homeowner had before losing their home to foreclosure has continued its steady climb and is close to one year(green). Bank are taking an average of 200 days to sell properties(red).
The California Association of REALTORS® have released the affordability numbers for the state of California and among them is the very expensive bay area and Santa Clara County is among them. Here is what they found.
- In Santa Clara County only 37% of the population can afford to buy a home at the $545,000 median range.
- The required take home to purchase is $117,630.
- Your monthly payment will be around $2,940.
The Chart below shows the cost of home ownership in California.
Pilot could open the door for more
The thought of a bank or investor willing to write off a portion of your mortgage can be very attractive but it does come with it’s challenges. Over the past four years there have been attempts to have principal reduction included in modifications and up to now there have been a few clients that I am aware of to have received this opportunity.
Most have had loan amounts under the conforming amount of $417,000. My concern with this decision by Bank of America is for homeowners who have made payments on time. How are they going to feel knowing their neighbor received a principal write down? The taxpayer is most likely going to carry the burden of this move towards principal reduction. This may also be the beginning for future programs but will they make a significant impact in our community?
Santa Clara County may not have an opportunity
The conforming loan amount makes it easy for Fannie Mae or Freddy Mac to offer this in most cases. Bank of America is a servicer, they don’t own the paper on the loans they service. Fannie and Freddy inventory is primarily located in areas where homes sold under the conforming loan amount. Santa Clara County would most likely not see much activity from this pilot program.
“The program will be funded from the $699.6 million the California Housing Finance Agency received from Treasury Department‘s Hardest Hit Fund last year. A spokesperson for the CalHFA said there is no set amount of loans BofA is targeting, but the bank will be soliciting eligible homeowners soon.”
Related Article: Bank of America set to write down principal on California mortgages (Housingwire)
The General Plan over the next 30 years
On Friday March 25th I attended the 2011 Industry Summit given by the Santa Clara County Association of REALTORS. Among the presenters was Sam Liccardo, San Jose Councilman and Co-Chair for the General Plan Task Force in the City of San Jose. Mr. Liccardo gave a preview of the tentative plan for San Jose that will be presented in 2012 for approval by the city.
Envision San Jose 2040 details the plans San Jose is working towards over the next 30 years and there are substantial changes that will affect the way we live in the Silicon Valley.
General Plan Projections
The plan for San Jose primarily focuses on real estate, jobs, transportation, schools, and retail. The following list highlights some of the specifics in the general plan.
- Adding 400,000 people to the current million plus population
- Planning for a 120,000 new hosing units(4,000 per year)
- Target green tech jobs
- Rail – San Jose Dirdon Station will be a major artery for BART, The Bullet train, and connection for light rail.
- Improve transportation methods – Express Lanes for busses in key areas
Major Attractions
Attracting jobs and professionals to San Jose especially when there is competition from San Francisco. San Jose will create a competitive advantage in the following ways;
- Create urban environments for a professional work force that creates an urban experience (Downtown high rise lifestyle)
- Diversity – San Jose is a melting pot of cultural backgrounds attracting international appeal
- Our neighborhoods – Families can live in a suburban environment yet be close to high tech jobs and access to entertainment
- Developing more charter schools and embracing the success of local school districts
- Low crime rate – Traditionally San Jose has always enjoyed being one of the safest places to live
Challenges
Of course there are always challenges in developing a plan of this magnitude.
- Cost to build housing in San Jose is too expensive at this time and can create a housing shortage once we work though the current surplus
- New rental housing is currently being built with rents in the mid $2,000 range creating an affordable housing shortage
- Opposition to urban high rise construction and the need to educate the community about high density housing
Village Concept
San Jose would like to create more retail/housing areas known as Village concepts similar to Santana Row. Santana Row has indeed created a prime example of how you can mix housing and entertainment in one location. Advantages include;
- Mixed use with ground floor retail
- Access to restaurants and entertainment
- Village concepts also reduce the need to get into your car and drive to to these locations
Development Over the Next 2-3 Years
Some of the immediate changes we can expect in the near future include;
- Construction of more downtown high-rises for high density housing
- Bus Express lanes in 2012-2013
- Construction and Expansion of San Jose Dirdon station
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