SETTLING IN—Simi residents, from left, Alicia, 5, Evan, 2, Kriss and Mike Corral enjoy a midafternoon snack at their home on Yosemite Avenue, which they purchased this year with the help of the city’s First-Time Homebuyer Assistance Program. Program opens doors for homebuyers Growing up, Simi resident Mike Corral wanted to live the American dream. He wanted a good job, a family and a decent home.

Though he had a good job as a social studies teacher and a wife and two kids, he had all but given up on the dream of owning a home.

“There was no way I could afford a house on a teacher’s salary,” he said. “And so it’s like, why even bother looking?”

But when his wife, Kriss, learned about the city’s FirstTime Homebuyer Assistance Program last year, she convinced him not to give up on the dream.

“He was the person that didn’t believe it was going to happen,” she said. “He thought it was insane to actually talk to somebody about buying a house.”

While he did not think they would qualify for the program, which offers down payment assistance to low-income homebuyers who pay 3 percent to 5 percent depending on their FICO credit scores, the couple submitted their application in March 2008.

In order to qualify as lowincome, the Corrals could not make more than $68,550 a year before taxes. The limit for a four-person household was increased this year to $70,000.

About six months after applying, they were approved for a loan. The couple then embarked on a nerveracking house hunt that culminated in March of this year. After living in apartments for a decade, the Corrals finally got the keys to their first home—a newly renovated 1964 single-story house on Yosemite Avenue.

While the couple liked the twobedroom apartment that they lived in for three years, they said their new five-bedroom, two-bathroom home is a huge step up. The kids have their own rooms, and with the extra space they were able to add a puppy, named Tank, to the Corral clan.

“The backyard is awesome,” Kriss said. “Somewhere for the kids to play is great.”

Their two kids, Alicia, 5, and Evan, 2, seemed to agree, running through the backyard and into the house, giggling the whole way.

There are many other lowincome families like the Corrals for whom the dream of homeownership seems out of reach.

Though the market is flooded with short sales and foreclosures, the recession has hit people’s pocketbooks, too, shutting them out of real estate.

The city’s program aims to change that.

Rob Bruce, deputy director of housing and special projects for the city, said that because of the downturn in the economy, developers are not building residential projects in Simi, which means less of an opportunity to increase the community’s affordable housing stock.

However, the nose dive the real estate industry took has allowed the city’s FirstTime Homebuyer Program to be more effective.

“Given that the real estate market has gone down so much, we are able to bridge that gap,” Bruce said, “the gap between the affordable price and the market price. Now the gap is narrow enough that our formula really works.”

The “formula” is this: The program offers qualifying low-income households a deferred payment second trust deed loan of up to $50,000 per bedroom, not to exceed $200,000.

In the case of the Corral family, they received the full $200,000. A portion of that loan was used for repairs to bring the property into compliance with the city’s Housing Quality Standards. Matt and Kriss had about $24,000 in repairs done on their new home, which included replacing all the windows.

As a result, $176,000 went toward the purchase price of $400,000. This in essence wrote down the price of the unit to $214,000. In addition to the loan from the city, the couple received a loan from Cabrillo Economic Development Corporation.

Bruce said the city encourages buyers to use Cabrillo because of its experience working with and assisting low-income individuals.

The Corrals also qualified for a $15,000 grant from Cabrillo, which will be forgiven if they live in the house for at least five years. The couple doesn’t have to pay interest on the loan from the city—which doesn’t have to be repaid for 55 years—and they pay property taxes only on the $214,000.

In order to keep units purchased through the program affordable, a 55year lowincome resale restriction is placed on the properties, which limits the amount the house can be resold for.

Linda Swan, who runs the FirstTime Homebuyer Assistance Program, said that 80 to 85 percent of applicants qualify for the program.

Since September 2008, when the program was modified to serve only low-income individuals, the city has received 40 applications. Of those, three applicants received loans and closed escrow on their homes. Two more are now in escrow and are going through the home inspection process.

About 25 others are shopping for their potential homes, Bruce said.

One obstacle those house hunters are facing is trouble getting financing from lenders who have become more conservative since the real estate market crashed.

For fear of over-encumbering a property, lenders will not approve a loan if the house needs significant rehabilitation. If the total cost of the home, including repairs, is more than 105 percent of the purchase price, lenders are backing out, Bruce said.

Because of this, the city is encouraging people to look at newer condominiums or town houses instead of detached homes that tend to need more work.

“The last thing we want to do is put a low-income household in a home that has a lot of deferred maintenance,” Bruce said.

Unfortunately, eight to nine homebuyers have fallen out of escrow due to the amount of rehab needed on the properties.

“The city is willing to do those repairs; we have the money . . . but the banks won’t lend,” said Swan, an associate planner in the housing division.

In the meantime, the city is looking for ways to solve the problem.

The Corrals said it was reassuring to know they weren’t going it alone as first-time homebuyers and that they had a “safety net” with the city.

The couple added that they feel lucky and grateful to the city for enabling them to buy a house for their growing family, which Kriss said has given her a sense of financial security.

She even sent letters of thanks to city staff with a photo of the kids playing in the yard.

“For me, it’s an accomplishment. I feel like I’ve accomplished something in my life,” Mike said. “Last year at this time we would have never thought we’d be in a house.”

For more information on the program, call (805) 583-6853 or visit www.simivalley.org.