Southeast Modesto could get 38 houses under $400k. Project is for 1st-time buyers
A southeast Modesto project puts a new twist on subsidized housing, with 38 dwellings for buyers rather than renters.
The nonprofit developers hope to sell each of the houses for $350,000 to $400,000, a project leader told the Modesto Planning Commission. It voted unanimously Monday, Oct. 20, to recommend final approval by the City Council.
The project is on four vacant acres on the west side of McClure Road, just north of Yosemite Boulevard. It would be for buyers making up to 80% of Stanislaus County’s median income. That cap is $76,000 a year for a family of four and varies for other household sizes.
Most affordable projects have been new apartment buildings or converted motels. Some of those units are studios reserved for people at just 30% of the median income.
The McClure project seeks first-time buyers who are closer to the median and need full-size houses. These would have three or four bedrooms and 1,300 to 1,600 total square feet.
The buyers would get help with down payments and monthly mortgage installments. They could sell the homes only to other qualifying people, not on the open market.
“This is something that we need in the community,” said Roger Shanks, the commission chairman. “The fact that you are maintaining the affordability over a period of time is important.”
Stanislaus Equity Partners joins in project
Stanislaus Equity Partners is planning the project with Self-Help Enterprises. They have lined up $11.2 million in state and federal funding. The Stanislaus Community Foundation could aid the financing through its new Housing Solutions Fund, at an amount to be determined.
The interest rate and other mortgage terms are not yet known, said Jessica Filbrun, president and chief executive officer at Stanislaus Equity Partners.
STEP, as it is known, formed in 2021 to support affordable housing and small business in the county. Self-Help Enterprises, based in Visalia, has worked since 1965 on housing, water and related needs around the San Joaquin Valley.
The first 17 homes could be ready by February 2027 and the remaining 21 by the end of that year. This assumes City Council approval of the rezoning needed for the site, tentatively set for Dec. 2.
Housing for the ‘missing middle’
The project is for what housing experts call the “missing middle.” These are people who make too little to buy typical market-rate homes but too much to qualify for most subsidy programs.
Houses in Stanislaus County had a median sale price of $495,000 as of June, the California Association of Realtors reported. A household needed at least $127,200 in annual income to cover the median mortgage payment of $3,180 a month.
“That’s just not affordable to low- and middle-income community members,” Filbrun told the Planning Commission.
The project is called McClure Meadows. The city staff helped trim the cost by allowing smaller-than-usual yards. Each home would have one off-street parking space rather than the standard two.
The funding includes $7 million in federal tax credits for investors in the project. They would get a break on their income taxes in exchange for the reduced payments from home buyers. The other $4.2 million is from a state program that helps with mortgage costs.
The project aims at “creating a pathway for families to build generational wealth and improve housing stability,” principal planner Michael Hren said in a staff report. The new owners could get counseling on household budgeting.
Easy walk to Cost Less Food, other stores
The location has another advantage: It is within a quarter-mile walk of Cost Less Food and other stores. That could reduce residents’ need for car ownership.
The homes would be on a long cul-de-sac entered from McClure. The new street would not connect directly with the busy Yosemite.
The site is zoned “highway commercial” due to its proximity to Yosemite, also known as Highway 132. The change would be to “low-density residential,” matching the neighborhood just to the north.
No one objected to the project at the Planning Commission. It will have a second public hearing before the City Council.
The county has two recent market-rate projects aiming to stay below $400,000. They do it not with subsidies but by building two-bedroom houses that are more like apartments in size.
In Turlock, these houses are mixed in with larger ones in the 178-unit Fifth Edition subdivision. Riverbank just approved 27 small houses on Claus Road at Stanislaus Street.
This story was originally published October 24, 2025 at 12:00 PM.
