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City may change first-time homebuyer aid program
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Changes in the house buying market are prompting officials to make changes to the city of Ceres' first-time homebuyer (FTHB) program.

Because the price of houses in Ceres has fallen with the rest of the nation, more people in very-low- and low-income households are eligible to qualify for them. With more people being able to buy, the city will be lowering the amount of assistance in the (FTHB) down payment assistance program.

According to, the median sales price of a Ceres home decreased by 40 percent between October 2007 and October 2008. The current median sales price of a Ceres home is $179,000, which means more households with lower incomes are able to afford to purchase a home.

The median sales price is defined as the sale price in the middle. Half of houses sold for more than the median, and half sold for less.

Seifel Consulting recommends that the city modify the program as follows:

• A household of four persons cannot make more than $45,200 annually;

• Lowering the maximum amount to be loaned from $100,000 to $80,000;

• Assistance will only be provided on property valued less than $423,750;

• That a component be added committing the borrower to share any appreciation realized upon the sale of the house.

Recommendations also include requiring any first-time homebuyer to put at least three percent down of their own money, rather than the current one percent. Seifel also suggests that the city require participants to attend a course to educate them on the ins and outs of buying a house.

By lowering the maximum amount to be loaned, the city will be able to help more households, said Brian Briggs, the city's Redevelopment and Economic Development Manager.

Under the FTHB program, the city does not require repayment until the property is sold or at the end of 30 years. Interest rates are also fixed.

The firm also recommends changes to the program where the city loans money to low-income residents for the rehabilitation of their home for health and safety reasons. Seifel suggests that the city's housing rehabilitation program loan:

• To households making less than $45,200 annually;

• For the rehabilitation of single-family houses or multi-family apartments for only health and safety problems;

• Offer assistance of up to $40,000.

The city program uses funds from the Home Investment Partnerships Program (HOME) funds, the CalHome Program and the Ceres Redevelopment Agency.

City Manager Brad Kilger said that it's been quite a while that the city adopted guidelines for both programs.

Councilman Guillermo Ochoa said he felt that $40,000 was not enough money for some home rehab projects. Staff members said the city could adjust the amount upward later after monitoring the requests that are submitted.

The Stanislaus County Housing Authority administers the rehab program while the city runs its FTHB program.