City of Santa Cruz - First Time Home Buyer Options
The First Time Homebuyer (FTH) Program provides low- and moderate income first time homebuyers with a "silent" second mortgage. Silent second mortgages require no monthly payments until one of several events occur at a point in the future.
Designed to fill the gap between what a first time homebuyer can borrow from a mortgage lender and the purchase price of the home, the FTH Program may be utilized to satisfy down payment requirements of the first mortgage lender as well as pay the borrower's closing costs and other fees associated with a mortgage loan. Depending on circumstances, several FTH Program funding sources may be layered together in a series of secondary loans.
Interested first time homebuyers must first select a property to buy that meets the requirements of the First Time Homebuyer Program. These requirements and other information about the First Time Homebuyer Program are available in the First Time Homebuyer Program Brochure.
In addition, FTH Program funds may be used by eligible borrowers in conjunction with a California Housing Finance Agency program that provides below-market rate interest rates on first mortgage loans. All properties purchased with FTH Program assistance must be located within the City of Santa Cruz and must meet additional requirements pertaining to the FTH Program funding source utilized.
First time homebuyers must work with their primary lender to complete the City's First Time Homebuyer Program Application. Once the application is completed, the lender sends it to the Housing Authority of the County of Santa Cruz for review. The first time homebuyer, the lender and the Housing Authority will work together to ensure that the application and is complete and all required documentation is provided.
Upon approval of the application, the Housing Authority will issue a First Time Homebuyer Commitment reserving the necessary amount of First Time Homebuyer funds for the borrower. An escrow period is established during which all funding is secured and any contingencies related to the sale are resolved. More information on the First Time Homebuyer Program process can be obtained in the First Time Homebuyer Initial Steps flyer and the First Time Homebuyer Newsletter.
First Time Homebuyer Program policies, procedures and forms can be found in the First Time Homebuyer Program Policies and Procedures Manual.
Home Investment Partnership Program
City of Santa Cruz receives federal funds each year through the U.S. Department of Housing and Urban Development (HUD) for the HOME Program.
The intent of HOME is to:
•· Provide decent affordable housing to lower-income households;
•· Expand the capacity of nonprofit housing providers;
•· Strengthen the ability of state and local governments to provide housing; and
•· Leverage private-sector participation.
The Home Investment Partnerships (HOME) Program was created by the National Affordable Housing Act of 1990 (NAHA) and is also administered by HUD. The intent of the HOME program is to provide affordable housing opportunities to lower-income households through direct assistance and partnerships with nonprofit housing providers, private-sector lenders and developers, and government agencies.
The City receives about $550,000 in HOME entitlement funds each year.
In addition to funding new affordable housing projects or units, HOME funds are used to fund the City's ongoing First Time Homebuyer and the Unified Housing Rehabilitation Programs. 
City HCD Policies and Procedures Manual
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