The Abridged version:
- Elk Grove leaders approved a new homebuyer assistance program aimed at “moderate” income earners in the city.
- The city is set to provide loans up to $60,000 to help first-time homebuyers with their down payments.
- The program would be the first of its kind in the region for moderate-income households, or annual income of $73,600 to $104,150 for a single person.
Elk Grove is set to become the first city in the region to help moderate-income earners buy their first home.
Down payment assistance programs aren’t new for the Sacramento region, which has multiple cities and organizations that provide funding to help low-income families purchase a home. In Elk Grove, households above a combined six-figure income could now qualify for a similar program.
On Wednesday night, the Elk Grove City Council voted unanimously in favor of a new homebuyer program aimed at people making between 81% and 120% of the area median income.
For a single person, that range includes people earning $73,600 to $104,150 per year. For a household of four people, the range is $105,100 to $148,800.
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The council hailed the move as helping more residents achieve the “American Dream” of owning a home.
“This is how we change somebody’s history,” Councilmember Sergio Robles said.
“I’m excited about this opportunity to be able to invest in our city and also invest in those who will become homeowners who will take pride in living in Elk Grove,” he added.
As the population of Elk Grove has grown swiftly over the last decade, home prices have followed.
The average home value in Elk Grove today is $626,000, according to housing market data from Zillow. That figure is about $200,000 higher than pre-pandemic home values, but lower than 2022 prices that peaked at around $690,000, according to Zillow.
Mayor Bobbie Singh-Allen remarked at how much home prices have changed, noting that her first home was a two-story house she purchased for $126,000.
“What it did for me and my family is tremendous,” Singh-Allen said.
City loans up to $60,000
The new program is part of the city’s broader aim of supporting it’s “missing middle” housing category, said Joshua Tovar, housing management analyst with the city of Elk Grove.
The city plans to dedicate about $400,000 in housing funds from the state for the initial pool of funding, or enough funding for about six participants, Tovar said.
The city could also draw down on its Measure E sales tax funds for the program as well. The city dedicated $2 million of those sales tax funds toward housing efforts in its current budget.
The program would give recipients up to $60,000 to cover down payment costs. The loans would be subject to 3% interest, but interest would be forgiven after 10 years “to encourage people to stay in their home for the long-term,” according to a staff report.
The program comes with a few caveats. Participants in the program would have to chip in for 1% of the home price and are required to be first-time homebuyers. Loan recipients would also be barred from renting out the property or using it as a short-term rental.
The new initiative joins a similar program Elk Grove has had since 2009 aimed at lower income households. Since it launched, the program has provided loans for 35 new homebuyers in Elk Grove and provided $1.4 million in loan assistance.
While Elk Grove is the first city in the region to develop a middle-income down payment program, similar programs exist in Los Angeles, Anaheim, San Diego and Emeryville.
City leaders anticipate that the full-program could launch by the end of 2026.
