New Long Beach Program to Help First-Time Homebuyers Provide $20,000 in Grants • Long Beach Business Journal

After losing her home in June 2009, North Long Beach resident Melvalyn Priddie is ready to buy one again.

“It was just building, building, building, since then, I’ve been working here, working there, and just trying to get back on track,” Brady said. “It takes that long.”

For Brady, a tax preparer, and her husband, who works with the Los Angeles Unified School District, cost is the biggest constraint — and the city’s new homebuyer assistance program, set to open to applications in the coming months, could provide much-needed relief.

“We’ve seen prices in Long Beach get out of hand,” said Briddy, who has also begun to explore manufactured homes as a more affordable alternative.

Although she’s lived in Long Beach since the 1990s, her family might consider moving elsewhere because of difficulties finding an affordable home in Long Beach, she said.

through the new city First Time Home Buyer Assistance Programmade possible by Long Beach Recovery Act funds, 100 eligible families will receive up to $20,000 in down payment and closing cost assistance, in the form of a grant, in lieu of a loan or mortgage servicing.

While home costs are still very high, rising interest rates have made it more difficult for low-to-moderate income homebuyers to get mortgage help, and we hope this help provides some much-needed relief, said Megan Sorensen, development officer. Housing in Long City. shore.

“We hope to at least take the burden off those who have a down payment saved but don’t realize how much closing costs will be, or for those who thought they were in the market, but now because of rising interest rates thought homeownership was no longer an option,” Sorensen said.

While the city launched its website in October, with applications expected to open in “early 2023,” no date has been announced as to when applications will open.

However, city officials expect the app to open around this spring.

In the meantime, the city plans to host informational sessions to familiarize potential buyers with the eligibility requirements as well as the process. City officials said the dates for those hearings are expected to be announced in the coming weeks.

Eligibility requirements for the program include household income not exceeding 150% of the median income in the Los Angeles County area, which means a family of four can earn up to approximately $136,650 in income.

Additional eligibility requirements include having US citizenship or permanent residency, along with being a first-time homebuyer, which the city defines as someone who has not owned a home in the past three years.

Applicants must also be first-generation homebuyers—people whose parents or guardians never owned a home during the homebuyer’s lifetime or who have lost their home due to foreclosure or a short sale and who do not currently own a home.

Anyone wishing to apply must also live within a designated federal Community Development Block grant census tract In Long Beach, or areas where at least 51% of their residents are low-to-moderate income, which is about half of the city, primarily in North, Central, and West Long Beach—although grant recipients can purchase A home anywhere in Long Beach, celebrity program specialist Stephanie Harper.

“Our Long Beach communities of color and people who have traditionally been excluded from owning a home,” Harper said. “We really wanted to make sure that this support goes to those who need it most.”

In addition, applicants must be pre-approved and work with a real estate agent, but they will not be eligible if they have already opened escrow on the home at the time of application.

After submitting an application, Harper said, applicants will receive an initial notice of eligibility for the program, so they can move forward with finding a home and an acceptable offer.

Once buyers open an escrow account, grants will be awarded on a first-come, first-served basis to pre-qualified applicants, and disbursed directly to escrow. Grant buyers will receive the funds within 30 days of opening the escrow, according to city officials.

While potential homebuyers may hesitate to open an escrow account on a home without knowing if they will get financing, representatives from the Long Beach Bureau of Housing and Neighborhood Services said grants would still be useful in covering any unexpected closing costs or buying the interest rate without reducing First batch buyers.

“We believe the city will help the many residents who were unable to close their escrow and obtain the keys to their new homes without us,” the office said in a statement.

Interest in the program is high – about 2,600 people have filled out interest form Harper said on the city’s website.

“I think it’s important from an equity perspective to help spread the opportunity for more families to own homes,” Sorenson said.

Depending on the success of this program, and funds that will become available in the future, more assistance programs may be offered to Long Beach residents.

While the program has the potential to be beneficial to lower-to-moderate-income families, homebuyers of all income brackets currently face enormous hurdles when it comes to home purchasing, said the realtor and former president and board director of Greater Long Beach Realtors. , Phil Jones.

Perhaps the biggest problem is the lack of inventory — in 2022, there were 736 fewer ads put to market in Long Beach than there were in 2021, according to Jones.

“This has just continued to exacerbate the inventory problem for buyers across all classes,” Jones said.

For low-to-moderate-income buyers, this situation is more complicated, because inventory is more limited for people with strict price constraints, Jones said.

Jones said housing affordability is a challenge statewide and across the country, though California has particular problems with housing development, where the costs of making building plans and starting construction are high.

“This, of course, adds to the overall cost of housing, further pricing lower-to-middle-income families out of the market,” Jones said. “It increases the cost of constructing new buildings to the point where it is no longer affordable.”

Nationally, experts estimate that the housing stock is up to 6 million units short of what residents need — but in California, that number is 3.5 million, Jones said.

“We make up more than 50% of the housing shortage in the country,” Jones said. “It’s a serious issue.”

Jones noted that there are measures being taken within Long Beach, including efforts to convert former commercial and retail housing into affordable housing.

However, many of the city’s initiatives, centered largely in the city center, are limited to renters, and minimum units are set aside for affordable housing.

“I think that’s the ‘not in my back yard’ reaction,” Jones said. “If the public had enough of these ‘not in my back yard’ people, and there were huge numbers of them, councilors wouldn’t have the political fortitude to push for that. I hope that will change, but I’m not optimistic that it will.”

Rising labor costs and supply shortages have only exacerbated the problem, Jones said, as have rising interest rates, which — though flat for the past two months — are expected to rise to 7%, if not higher, over the course of this year. .

If interest rates rise, it affects buyers’ ability to buy. “It reduces their purchasing power,” Jones said. “It adds to the list of challenges first-time homebuyers face.”

At the state and local level, Realtors’ associations are pushing for the ability for low-to-middle-income families to begin building generational wealth through homeownership, Jones said.

Jones said that while programs like the Homebuyer Assistance Program are important, what’s more important is reducing barriers to housing creation.

“The Homebuyer Assistance Program is good — I don’t think it’s nearly enough,” Jones said. Twenty thousand dollars for about 100 families will help somewhat, however. . . We really have to continue working with local councilors and local city employees and bureaucrats to find easier and cheaper ways to build homes.”

As for Brady, she’s a cautious optimist, looking forward to learning more about the city’s program requirements and whether it’s possible for her and her husband.

“I think there should be a lot of first-time homebuyer programs out there,” Brady said.

More information about the Home Buyer Assistance Program is available Online And by calling Long Beach Resource Line at 562.570.4246 between 9 a.m. and 4:30 p.m. weekdays.

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