Thursday, Dec. 18, 2008

Family gets gift of home for holidays

Ceres program assists first-time home buyers with down payment

CERES — After renting for 17 years, Luis and Elsie Garcia figured a home always would be out of reach.

But this week they are savoring the blessings of homeownership, thanks to the slide in home prices as well as down payment assistance from the city of Ceres.

Their four-bedroom home in The Terrace subdivision, off Richland Avenue, is large enough for the couple, their three children and 9-month-old granddaughter. They had lived in a second-floor apartment in Modesto, which required Elsie Garcia to carry groceries up a staircase.

"It was hard with a two-bedroom, one-bath apartment, with everyone fighting for the bathroom to take a shower," Luis Garcia said. "This is large enough for the kids to grow, and the neighborhood looks pretty nice."

The Garcias and 13 other buyers at the subdivision each qualified for $30,000 in down payment assistance from a first-time home buyer program called BEGIN, or Building Equity and Growth in Neighborhoods. Some families, including the Garcias, were moving in this week in time to put up their holiday décor.

The funding comes from Proposition 46, the 2002 measure that created a $2.1 billion trust fund for housing and emergency shelters in California.

Working with Merced-based Envision Homes, the developer of The Terrace project, the Ceres redevelopment agency was awarded $600,000 from the state to assist buyers in the 25-home first phase.

The city is hoping to help 24 other families in buying their first homes. It expects to receive another $600,000 in the spring when the 21-home second phase opens. Three model homes in the first phase also will be sold at that time.

Bryan Briggs, the city's redevelopment and economic development manager, said Ceres met the key requirements of the BEGIN program. Its median income fell within the guidelines and it had an approved project.

Even though the state is mired in budget troubles, there is $40 million in the second round of BEGIN funding. "The other day, a state representative said about half is still available," Briggs said.

The down payment help, along with price cuts, allowed Envision Homes to sell out the first phase despite a slow housing market. Sales were sluggish after the project opened in June 2007, but quickened when the developer cut as much as $65,000 off the list price of different floor plans in July 2008. The company sold 17 homes in the next 2½ months, said sales manager Alvena Safar.

"With the lending market the way it was, a lot of home buyers were not able to purchase a home without the down payment assistance," she said.

The prices ranged from $164,990 for a two-bedroom floor plan to $209,990 for a four-bedroom home with 2½ baths, a laundry room and loft. The first-phase homes are two-story, with two-car garages and ample back yards.

According to the guidelines, a family of four with annual income of less than $67,800 qualified for the BEGIN program. Buyers had to come up with $3,000. The down payments served to lower the the amount that had to be borrowed on the 30-year fixed rate mortgages, making the monthly payments affordable.

Many of the buyers have payments of $1,055 to $1,400 a month, including property taxes and fees, Safar said. Mortgages exceeding $2,000 a month were common when the Modesto-area market peaked a few years ago.

Owners have to repay the $30,000 after 30 years or if they sell the home before then.

Luis Garcia, 43, who works at McCoy Truck Tire Service Center in Modesto, said he looked at foreclosure sales for about three months. Even though there were plenty of bargains, he didn't have enough money to put down on a home that met the family's needs, he said.

Then his real estate agent told him about the Ceres project. Because of the big down payment, his mortgage is close to the cost of renting a house for the six-member family, he said.

Elsie Garcia said she's glad to have a larger dwelling and that each of the three children, ages 7 to 17, has a bedroom.

"I always wanted a house for my kids, a place that I can call my home," she said.

Merced was another area city to receive BEGIN funding. Down payment help is offered at the Envision Homes Silverleaf subdivision there.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or 578-2321.