Napa County’s signature program to help people buy local homes near local jobs is reporting 93 families helped over the past five years.
The program, which is funded with housing impact fees paid by developers, spent $3.8 million, or more than $40,000 per recipient over this period. Since 2010, 132 families have bought homes.
The proximity workforce housing assistance program is one county response to the affordable housing crunch. It uses affordable housing funds to help homebuyers with down payments – but recipients must meet certain income requirements and work in Napa County.
County supervisors on Tuesday reviewed a program established in 2010. The Auditor-Controller’s Office looked at the period from 2014 through 2018.
For Supervisor Brad Wagenknecht, a figure that stood out was the estimate that the program has cut 57,100 travel miles by bringing people closer to their jobs.
“That’s one of the reasons we did this,” Wagenknecht said. “That’s 57,000 miles people aren’t out on the road, clogging roads. That’s taking a piece out of the commute.”
The program provides loans for up to 10 percent of a house’s price. The household can earn no more than 120 percent of the area’s median income. The recipient’s Napa County job must be within 20 miles of the house purchased.
The compliance review suggested making a few rule changes in keeping with the intent of the program. Supervisors agreed and will take up the issue at future meetings.
For example, the rules while addressing income don’t mention gifts. An applicant who meets the income requirements could also receive $100,000 from a parent for the down payment and use the county loan to buy a more expensive house, a county report said.
“This does not appear consistent with the spirit of the program, which is to help proximity workers who would not otherwise be able to purchase a home in Napa County,” the report said.
Deputy County Executive Officer Molly Rattigan said these large gifts are something the county has started to see more regularly. She suggested limiting the applicant’s portion of the down payment, including gifts, to a maximum of 10 percent of the home’s price.
Supervisor Alfredo Pedroza noted that this 10 percent combined with the 10-percent county loan would still allow for a total 20-percent down payment. That’s the threshold to avoid mortgage insurance.
Or applicants might own and live in a house with significant equity in another county, such as Solano County. Instead of selling the out-of-county house to help with the down payment on the Napa County house, they might keep it as a rental property.
“I think it’s our interpretation it’s not in the spirit of the program to have a second home and a rental income,” Rattigan said.
The Board of Supervisors agreed to make rule changes at a future meeting.
Auditor-Controller Tracy Schulze said the compliance review shows the program has successfully assisted many low-to-moderate income families who otherwise couldn’t have bought a local home. The review looked at such things as whether recipients have met the requirement that the job be within 20 road miles of the house.
Former county Supervisor Mark Luce championed the creation of the proximity workforce housing assistance program. Since its inception, it has approved 277 applicants for loans, with 132 actually finding a house and closing on a loan.
Loan recipients repay the county the loan amount upon sale of the house or 55 years, whichever is sooner. They also pay a share of the increased home value. The money goes back to the county affordable housing fund.
For example, a recipient receiving a 10 percent, $10,000 loan for a house costing $100,000 might sell the house for $150,000. The repayment to the county would be $10,000, plus 10 percent of the appreciation, in this case $5,000, a county report said.
Recipients can also choose to repay the loan when refinancing the first mortgage.
Most of the money for the program comes from the county housing impact fee on development. Money available in the program for 2019-20 could be around $600,000, combining proposed new funds and the rollover.
Go to https://bit.ly/2WU4XzM to find out more about the proximity workforce housing assistance program.