City Opens Door to Financial Aid for First-Time Home Buyers

The yard is overrun with weeds, and the small house is vacant and run-down, but 13807 Penn St. is about to become one of the most important addresses in Whittier.

The three-bedroom house will serve as a model for a proposed city program to help low- and moderate-income families buy their first homes.

At Tuesday’s meeting, City Council members--who constitute the Redevelopment Agency’s board--authorized the city staff to advertise for bids to renovate the city-owned property. The work, which would include extensive earthquake repair, should be finished in about two months. The city will then sell the house to a first-time home buyer and provide financing assistance if needed. The amount of city help will be based on the size of the family and its income.

City officials hope that the house will be the first of many made available to help renters graduate into homeowners. City staffers are currently ironing out the final details of the proposed home-buyers assistance program and expect to bring it to the agency for approval later this month.

The city will pay for the project from tax proceeds the federal government requires cities to set aside for affordable housing programs. Whittier has accumulated about $1 million for this purpose so far, Housing Development Manager Anthony Ybarra said.

The City Council originally approved the concept in July, 1987, but that year’s Oct. 1 earthquake put the idea on hold. Officials decided that the city’s housing resources were needed to help families rebuild from the earthquake.

Four years later, most residential earthquake repair work is well in hand, but the problem of finding affordable homes is more acute than ever, Assistant City Manager Hank Cunningham said in a report to the agency.

The staff’s preliminary proposal suggests two ways that the city could subsidize low-cost homes: The city would buy and fix up a home and then sell it to a first-time home buyer. The price of the home, when sold, would not exceed $190,000. Under this option, the city would recover most, but not necessarily all, of its investment. The second method proposes that the city help with financing a home purchase. In order to make a home affordable, the city would provide a second mortgage to the buyer. The home itself would be the security for the loan, and the borrower would not have to make loan payments to the city for up to 10 years.

To qualify under the proposed plan, family members must have lived or worked in Whittier for two years before applying. They cannot have owned a home in the last three years and must be U.S. citizens or legal residents. Family income must fall within housing-assistance limits set by the state. The income of a family of four, for example, could not exceed $52,200. Participants must also provide at least a $5,000 down payment.

If approved, the affordable-housing program would not be the only recipient of Whittier’s housing funds. City officials last fall pledged to support a rehabilitation project for the neighborhood surrounding John Greenleaf Whittier Park. In that project, La Habra Neighborhood Housing Services will manage a nonprofit loan fund to help homeowners fix up their residences. The city has already committed $300,000 to spruce up that area’s run-down park.

The city has also used its housing funds to help pay for William Penn Manor, which provides low-cost apartments for seniors.