Company will split house down payment with you

SAN DIEGO - Saving up for a home down payment is getting even harder for San Diegans.

The median price is now nearly half-a-million dollars, and high rents are eating up savings that could otherwise go to that first home. 

But a local company believes it has the solution to help local families get into their first home.

David Battany saved for nearly a decade before he could afford his first home.

“It was just incredibly scary, to come up with a down payment and also looking at that monthly mortgage payment, it was a big gulp moment,” Battany said.          

He said he doesn't want other San Diegans to have to wait that long. That’s a tall order as median prices hover around half a million dollars, and rents making saving for a down payment next to impossible.

“It can be tough,” Battany said. “A lot of borrowers are still struggling.”             

But a new program though Battany’s company – Guild Mortgage - offers to split a 20 percent down payment with San Diegans looking for a home.

That would shave hundreds of dollars a month off a mortgage payment and eliminate the need to buy mortgage insurance.

But there are strings attached.

If a family buys a home for $500,000, a 20-percent down payment is $100,000. The buyer puts in $50,000, and the program will match it. But when that family sells, it owes back the $50,000 plus 35 percent of the value gain.

And families who don't sell within 30 years - automatically have to pay back that 50 grand plus the equity share.

They also aren't totally free to borrow against their home's value.

Guild is partnering with investment group Unison to offer the program.

“I think it’s a really useful housing ownership option,” Mark Goldman, a real-estate lecturer at San Diego State University, said. “It’s not the best thing ever, but is it a good option to consider, yes? It does add another party to the transaction.”

Battany said families will have thousands more to spend because of the lower mortgage payment - something that would have greatly helped him decades ago, when he was in their shoes.

"It was just like how can i afford to pay this,” Battany said. “How much money do I have left over for food and utilities and anything else?"

 

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