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.
“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?"