Housing Trust Silicon Valley (HTSV) is a Community Development Financial Institution (CDFI) that helps Silicon Valley residents secure down payment assistance to purchase their first home as their primary residence. HTSV has two programs with different features and benefits. Both programs have a shared appreciation stipulation, meaning that when you sell or refinance, you will share some of the home’s appreciation back to the organization. I will review a sample scenario of shared appreciation below. Both programs also require that your first step prior to applying is to attend an 8-hour HUD-certified homebuyer education class (the certificate is good for 2 years).

Both down payment assistance programs:

• Are DEFERRED loans: they have no interest and no payments due during their term; the benefit to HTSV is in the shared appreciation model.
• You can have no more than $125k post-close assets remaining after down payment and closing costs. Retirement accounts are excluded.
• The home must remain owner-occupied throughout the life of the loan.
• The property being sold must currently be owner occupied or vacant; there can be no tenants.
• Minimum borrower contribution requirement is 3% of the purchase price, although half of it may come from a gift from family (1.5% borrower contribution / 1.5% gift funds)

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Here are some of the different parameters for the two programs:

 

EMPOWER: Empower Homebuyers SCC program

 

• ONLY for Santa Clara County, and you must currently either live or work in SCC
• Down payment assistance up to 30% of the purchase price with a maximum loan amount up to $250k, 30 year loan term.
• Current household income cannot exceed the following limits per household size:

Household Size	1	2	3	4	5	6
Income Limit	$152,300	$174,050	$195,800	$217,550	$234,950	$252,350

• Minimum credit score 620
• THE BIGGIE: SHARE OF APPRECIATION: The principal + a share of appreciation will be due when you sell your home. The share of appreciation is equal to the percentage of the Empower loan amount. For example, if you request a full 30% loan, then you will share in 30% of the home’s appreciated value. In addition, the share of appreciation is capped for the 1st 10 years of the loan. In Years 1-10, the share of appreciation CANNOT exceed the original empower principal loan amount; in Years 11-30, it can.

Here’s an example of the shared appreciation model if you sell the home within the 1^st 10 years:

ASSUME: $700k original purchase price, 30% Empower loan secured ($210k). You contribute the minimum 3% of $21k.  You sell the home for $900k, and therefore $900k – $700k = $200k appreciation.

• $200,000 appreciation
• -$21k initial contribution
• X .30 (30% of appreciation)
• $53.7k to HTSV

Therefore, total due to HTSV is the original Empower loan of $210k + $53,700 share of appreciation = $263,700

 

HELP: Homebuyer Empowerment Loan Program

 

• Down payment assistance up to 10% of the purchase price
• Max purchase price: $800k
• Maximum gross annual household income:

Household Size	1	2	3	4	5	6
Income Limit	$177,660	$203,070	$228,410	$253,820	$274,120	$294,420

• property must be in Santa Clara County OR in the cities of Menlo Park or East Palo Alto
• minimum credit score: 680
• As in Empower, you will also owe a share of appreciation, based on the percentage of the HELP loan amount.

 

THE STEPS TO APPLY FOR HTSV’s DOWN PAYMENT ASSISTANCE:

1. Get your homebuyer education certificate (good for 3 years)
2. Complete the online interest form, where you will then get prescreened
3. Get preapproved and apply for down payment assistance with HTSV
   • You will have a 30-minute pre-purchase phone review with HTSV
   • Submit the application and all required documentation
4. Once officially approved with HTSV, you will receive a “determination of eligibility” letter and NOW you can place an offer on a home

Contact me with additional questions and if you’re looking to secure this type of down payment assistance.