City council approves its program changes to first-time homebuyers loan

Soon to offer a 30-year First Time Home Buyer’s loan, with a 20-year, 3 percent interest rate — of up to $50,000 — the city of Susanville is looking to incentivize keeping its residents in the city.

The guidelines for the program were sent to and unanimously passed by the city council Aug. 7. The move forward includes reverting back to the 2015 guidelines for the Community Development Block Grant program.

Under the CDBG, was another program called the Owner-Occupied Rehabilitation Program. The OOR will assist eligible applicants in performing needed repairs on existing homes.

March 20, the council completed and adopted a set of guidelines for both the FTHB and the OOR, but the version adopted was what the city staff called a “boilerplate version” that was provided by the state. However, the city already had a set of guidelines for its CDBG program.

The version from the state also included language for CalHOME, for which the city had no grant funding.

The program’s loan committee recommended keeping both the FTHB and OOR program guidelines separate, thus choosing to revert back to the set of guidelines in 2015.

The purpose, according to Susanville Project Manager Quincy McMCourt, was, “to make it easy for everybody moving forward.”

The committee also recommended two other changes to the guidelines before the passage by the council. Instead of 45 years for repayment of the loan, the committee recommended 30 years.

It also included a 3 percent deferred interest rate that will be charged annually for the first 10 years. The 3 percent interest will be then drop off by 3 percent in the 11th through its 20th year, leaving only principal after the 20 years.

“Essentially, you can stay in the home for 20 years and then, theoretically, you can sell it and you would have removed from the equation any interest,” said McCourt. “However, should you elect to sell before 20 years, the city would then collect that interest.”

McCourt explained the committee’s proposal went against the state’s recommendation of a deferred interest loan, which leaves buyers with no interest for 45 years and then a giant balloon payment at the end of the term.

The changes recommended by the committee were sent off to the state, where they were approved prior to its presentation before the council.

McCourt also shared with the council that around ten people had expressed interest in both the FTHB and OOR loans, but also the city had yet to begin to create a formal waiting list for submissions.

The requirements for submitting a future application include conditions such as pre-approval from lenders. However, until the program is finalized, no applications are being accepted.