Affordable Homeownership Program

The City has about 25 units of deed-restricted for-sale housing under the Affordable Homeownership Program. Owners of the units must be very low-, low-, or moderate-income at the time of purchase. When owners decide to sell the units, they must sell them to other very low-, low-, or moderate-income buyers at a price set by the City.

Available Homes

No homes available at this time.

Buyers must obtain their own financing. The City does not provide a loan for the purchase of the property.

Frequently Asked Questions

What are the income limits?

The 2017 annual income limits are shown below. These are based on gross (pre-tax) income. For information on what the City counts as income, please contact program staff.

To purchase one of the homes in the program, your income must be less than the amount listed for your household size for the income level of the unit. For example, if you wanted to purchase a low-income unit and you had three people in your household, you could not earn more than $54,850.

Income Group % of Area Median Income Number of Persons in Household
1 2 3 4 5 6 7 8
Very Low 50% $26,650 $30,450 $34,250 $38,050 $41,100 $44,150 $47,200 $50,250
Low 80% $42,650 $48,750 $54,850 $60,900 $65,800 $70,650 $75,550 $80,400
Moderate 120% $63,900 $73,050 $82,200 $91,300 $98,650 $105,950 $113,250 $120,550

Do the income limits change?

Yes, the income limits change annually.

How do I apply?

To apply to participate in the program, you will need to get an application from the seller or the seller’s agent. Applications are only available through the seller. You cannot apply unless there is a home for sale at the time. The City does not maintain a waiting list.

When do I apply…before I make an offer or after it is accepted?

You apply once your offer has been accepted. The seller should accept your offer contingent on your approval by the City. In limited cases and at the seller’s request, the City may pre-qualify one or more buyers prior to offer acceptance to help speed the sale timeframe.

How long will it take to be approved with the City?

The approval time varies by household. In cases where the income and other back-up documentation is complete, straightforward, and consistent, approval may take only a few days. Many households have more complicated situations, and it may take up to a few weeks if the City has to do independent verifications of income. The best thing you can do to speed the process is to provide all the documentation up front, and be diligent about answering questions and providing additional information. Almost all applicants will need to clarify some items.

How long does the approval last?

The approval is good for only the home in question and generally lasts for up to six months, unless there is a significant change in the household’s income or composition.

Why do I give the City detailed information about my finances?

The application asks for back-up documentation, including pay stubs or other wage/benefit information, tax returns, and bank statements, among other things. We need to have this information to assess your eligibility and calculate your projected income over the next 12 months. Your financial information is confidential and not available publicly.

What if I get a raise after I buy the house?

You only need to income-qualify at the time of purchase. Your income may go up after you purchase the home.

Is this program for first-time homebuyers only?

No, the program is open to all income-qualified households. However, please be aware that you must live in the home. You may not rent it out (except with very limited exceptions), and if you don’t live there, you will need to sell it. If you own other property, the City will include any rent you earn from that property as a part of your income.

Is there a list of homes in this program?

As homes become available, we feature them on this website. Often, there are no homes available.

Is there a homebuyer education requirement?

Yes, all buyers must take an 8-hour homebuyer education course before the close of escrow. (The class does not need to be taken before you apply.) There may be a small fee to take the course. You can sign up for the course by contacting NeighborWorks at (916) 452-5356 or www.nwsac.org.

Are there any restrictions on the type of mortgage I can have?

Yes, you must purchase the unit using one fixed-rate, 30-year mortgage, cash, or a combination of the two. Any additional loans, downpayment assistance, closing cost assistance, etc. may be approved on a case-by-case basis at the City’s sole discretion. Please note that adjustable-rate loans, temporary interest rate buydowns, and/or balloon payments will never be accepted.

Would the City have a second loan?

It is a loan, although not in the traditional sense. The City does not provide funding to purchase the property, and there are no payments required until the property is no longer owner-occupied or unless the owner has a default. The City does have an investment in the property and requires that it remain affordable.

The City secures its investment in the property through an Individual Regulatory Agreement, which runs with the land, and a Promissory Note and Deed of Trust, which are specific to the purchaser.

  • The Individual Regulatory Agreement requires that you sell the unit to an income-qualified household at a price set by the City, among other policies.
  • The Promissory Note and Deed of Trust secure the shared equity.

What is shared equity? Do I have to share the sale proceeds with the City and if so at what ratio?

Shared equity means that the City will receive a portion of your profit when you sell the home. The ratio for each home is set when the buyer purchases it. The City’s equity share is the difference between the appraised value and the purchase price, divided by the appraised value.

Here is an example of how the equity share is calculated and then what happens when the buyer goes to sell the property. The numbers in the example are hypothetical.

Property Purchase
Sales Price $165,000
Appraised Value $170,000
Difference (appraised value – sales price) $5,000
City Equity Share 3%
Buyer Equity Share 97%

Resale (Note: The unit must be sold to another income-qualified buyer at a price that the City sets.)
Sales Price $200,000
Original Purchase Price $165,000
Equity (sales price – original purchase price) $35,000
City Equity Share $1,050 (3% of equity)
Seller Equity Share $33,950 (97% of equity)
Total Payout to Seller $198,950 (original purchase price plus share of equity)

Will this program cause a delay or make the process of buying the home longer?

Possibly. The City’s approval may add a few days to a few weeks to the process. Some lenders also need additional time to get the City’s program approved internally. Buying a home is a lengthy process and it is generally not a good idea to make firm commitments to move out of your current housing early in the process.

Who can I contact if I have questions?

If you have questions about the City’s policies (e.g. application, equity share), please contact Housing Department, at (916) 478-2265 or housing@elkgrovecity.org.

If you have questions about a specific property for sale, including to set up a showing, please contact the seller’s agent. That person will be listed in the ad for the property.

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