How Helpful Are Oakland’s First-Time Homebuyer Assistance Programs?

Because Bay Area residents pay more for housing than almost anyone else in the nation, buying a new home is a distinctly competitive exercise. Oakland residents seeking to become homeowners face a particular challenge — new arrivals with deep pockets.

Oakland’s median household income is $52,962, but the median home price in Alameda County is $795,400. According to the California Association of Realtors, new buyers need a minimum income of $154,610 to afford the median $3,870/month for a mortgage and taxes.

Even though Oakland’s median home price is $650,000, many local buyers are still frozen out of the market, even though several programs give low- and moderate-income buyers a boost.

Photo: mk30/Flickr

Under Oakland’sMortgage Assistance Program(MAP), residents who earn up to $42,369 can get a loan for up to 30% of a home’s purchase price (not to exceed $75,000.) Residents who earn between $42,369 and $63,554 can apply for a maximum loan of 20% of the purchase price, with a top limit of $50,000.

Although MAP loans are available, funds forCalHome, a separate program that only helps low-income, first-time buyers ($42K and below) are not available at this time. CalHome applicants may apply for loans up to 30% of a home’s purchase price, not to exceed $60,000.

We contacted a CalHome representative earlier this week to find out when these funds would be restored, but did not receive a reply. On the federal side, some Oakland residents may also qualify forFederal Housing Administration loans(FHA) or home loans guaranteed by theVeterans Administration.

“Most of my clients are moving from out of state or they’re coming from San Francisco,” said Robert Parker, an Oakland-based sales associate. About 10 percent or less of his active clients are Oakland natives, he estimated.

35th amp; Adeline. | Photo: Radio Nicole/Flickr

Via email, realtor Christine Cheng told Hoodline that about half of her clients are Oakland renters buying their first home, most of whom “submit offers that are conventional loans or cash offers.”

Separately, Cheng and Parker agreed that buyers who use assistance programs are at a disadvantage. “At the end of the day, cash is king,” said Parker. “If you have more than 20 percent, you’re doing well. If you have all cash, you’re sitting great.”

Parker said he’s skeptical about assistance programs’ ability to give first-timers a leg up in a hot real estate market. “In a competition scenario where there’s five or six offers, the listing agent would be leery about them as a buyer and whether they could perform, he said.

Sellers generally prefer offers “with little to no contingencies,” said Cheng, “as they provide for shorter closing periods and fewer conditions are required by the lender to close.” As a result, buyers who have a 20 percent down payment or cash above and beyond the asking price have an edge.

“It’s not to say you can’t find a house in Oakland with these programs, but perhaps be flexible with your search criteria,” Cheng said. “Be patient and know that you are likely to write at least a few offers before one is accepted.”

With interest rates expected to rise this year, Parker said many of his clients are liquidating IRAs, 401(k) accounts, and other savings. “People are going to be a little more frantic to get into a home, especially if they have tech money,” he said.

Ultimately, Cheng said first-time buyers should set aside emotion when it comes making one of life’s largest financial commitments. “It’s a numbers game, so don’t get too attached when submitting an offer,” she said, adding that buyers should ask agents to search for homes that have been on the market for over 21 days.

An Oakland homeowner who preferred to remain anonymous told Hoodline that first-time buyers should make a point of visiting open houses in their neighborhoods. “I know I’d rather sell to someone who already lives here,” she said, because “that promotes neighborhood character.”

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