Purchase Assistance Loan Program (aka PAL)

by on October 15, 2011

The Purchase Assistance Loan program is the last program I wanted to introduce to you from the Housing Trust of Santa Clara County.

This program is designed specifically to provide a deferred second loan up to $50,000 to help individuals or a family to purchase a foreclosed or abandoned home in areas of San Jose that are deemed eligible. It is funded under the San Jose Consortium’s Neighborhood Stabilization Program (NSP2). It can also be used for homes that are ‘at risk’ of foreclosure, in other words, a short sale.

There are the three criteria which make a property eligible for this program:

  1. It has been foreclosed
  2. The home owner is late by at least 60 days on their mortgage payments
  3. The home owner is late on their property tax payments at least 90 days

At least one of the above has to be present for the home to qualify.

Another thing that could make a home ineligible is if it is in a flood plane. Lastly, it must be in a census tract that is eligible for the program. You can visit the Housing Trust website to check on this by going to: http://www.housingtrustscc.org.

The PAL is a 30 year loan with an interest rate of 0%. Payments are deferred until the expiration of the term (30 years), sale of the home, or refinance of the first mortgage. There are no monthly payments on a PAL loan.

Some important guidelines that differentiate PAL from the other Housing Trust home buyer programs:

  • You do not have to be a first-time home buyer to qualify, however you must live in the home as your primary residence
  • The purchase price of the home must be 1% below the appraised value (this seems complicated but it is not)
  • You must complete an 8 hour HUD approved Home Buyer Education class for a nominal fee.

Home buyers earning up to 120% of the Santa Clara County median income purchasing foreclosed homes in designated census tracts in San Jose. In other wards, if you have a single member household, you income can not exceed $87,000. If you have a household of 4 then your income can not exceed $124,300.

I have a table of incomes and would be more than happy to explain the merits of the program if you are interested. I am also willing to accompany you to the Housing Trust of Santa Clara Counties offices to make sure you get your questions answered direct from the source.

Just call me today and we can get started. My number is 408-839-2125.

I look forward to helping you make your dream of home ownership a reality.

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