OCEANSIDE, Calif. (KGTV) - The Oceanside City Council just gave preliminary approval to a plan that would use city development fees as a way to provide homebuyers help with their down payments.
City Councilman Christopher Rodriguez presented the idea, which he calls the Affordable Market Purchase Program (AMPP).
"It's a win-win," says Rodriguez. "And it's the fastest way, in my opinion, to creating home ownership."
Under the plan, people could borrow up to 20% of the home's asking price from the city. But, it can only be used on single-family homes up to $600,000 or multi-family units (townhomes and condos) up to $450,000.
The money comes from the city's "In-Lieu" fund. That money is a fee developers pay to the city when they don't include the required affordable housing in their project.
Rodriguez says the city currently has about $6.7 million in the fund.
"Every million dollars could help 14 people with down payments," he explains.
To qualify, people need to be first-time homebuyers who make less than 115% of the county's median income. That's around $86,000 a year for a family of 4.
They have to have been either living in Oceanside for a year or working in Oceanside for six months.
The program is also available to veterans or seniors who are over 65 or over 55 but currently living in an Oceanside mobile home park.
Applicants must also chip in at least 1% of the home's value as their down payment.
Rodriguez says this program can help people who otherwise wouldn't be able to buy a home because they can't save for a large enough down payment.
"A family that is struggling to make ends meet and pay rent and unable to save, now they're able to use a program like this," he says.
The loan from the city would be repaid when the home is sold again, or when there's a title transfer, first mortgage repayment, or in 30 years.
In addition to the full cost of the loan, the city would also get 25% of the appreciated value of the home. That money would go back into the fund to help more people.
"It's unique, it's relevant, and our community desperately needs opportunity," says Rodriguez.
He adds that this could help businesses retain employees. Right now, many people who work in Oceanside live 20-30 minutes away. Rodriguez says getting them to buy homes in town would make them more effective as employees and more likely to stay in their current jobs.
The City Council gave the plan a preliminary approval at Wednesday night's meeting. Now city staff will draft a formal proposal. Rodriguez hopes to present it to the full Council in June.