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First time buyers in Lompoc may qualify for financial assistance from the city

Posted: 6:49 PM, Nov 20, 2019
Updated: 2019-11-20 22:09:44-05
City of Lompoc offering thousands in assistance to first-time homebuyers

Buying your first home is a big milestone in anyone's life, but for some that dream is more difficult within the state of California.

The City of Lompoc however is trying to help out first time buyers purchase their first home. The Homebuyer Assistant Program consists of giving eligible buyers a down payment loan of up to $65,000 and a closing cost grant of $7,500.

"It is income restrictive so you can earn up to 120 percent of the area median income which right now for a four-person household is about $90,000," said Christie Alarcon, Community Development Director for the City of Lompoc.

For the full list of borrower qualifications and elgibility requirements click here .

The City of Lompoc is making funds available through its housing trust fund to make home ownership more of a reality in the city.

"It is a silenced second mortgage so you get up to $65,000 and it accrues interest at 3 percent interest and it is differed for 30 years... and it includes a $7,500 closing cost grant," said Alarcon.

The city said the number of people they will be able to assist when purchasing their first home is determined by the amount of money in the trust fund.

As of Wednesday afternoon, the city already had three buyers in the program who were going through the certification process.

Broker with ERA Real Estate in Lompoc Carolina Palacioz said this program can truly make an impact for first time buyers in Lompoc where the average house costs around $375,000.

The loan will help out with 18 percent of the home purchase price and according to Palacioz buyers will have to come up with 2.5 percent of the home price.

"So with this program, if they can come out with a 20 percent down... they could avoid the mortgage insurance just because of that. It is a substantial saving per month they could put towards the mortgage which will give them more house," said Palacioz.

The loan must be paid back in 30 years or upon the resale or refinance of the home.

Those who do not live at the respective residence of default will also have to pay the money back.

However, Palacioz said she is glad to see this type of program around as it can truly make a difference.

"It will give you that little push that you maybe need to be able to qualify for a house. To get to that goal that without it... it may not be possible," said Palacioz.

The city said the intent of the program is to help keep people's first mortgage cost below 30 percent of their annual income.