Gregory J. Nickels (former Mayor)
SUBJECT: Mayor launches program to help teachers buy a home
11/8/2005 9:40:00 AM
LeAnne Nelson, (206) 684-0604
Mayor launches program to help teachers buy a home
Up to $45,000 toward home purchase, no lender fees, and reduced closing costs
SEATTLE –Mayor Greg Nickels and the Office of Housing launched a program today to help Seattle school teachers buy a home in the city by providing low-interest, long-term loans of up to $45,000.
The Teacher Homebuyer Program requires no payments for 30 years or until the home is sold; a three percent interest rate, which is forgiven if the homebuyer lives in the home for 30 years; and a $500 reduction in closing costs and no lender fees.
"This program will bring homeownership within reach for many teachers and provide continuity to our schools and stability to our neighborhoods," Nickels said. "We can’t afford to lose teachers because they can’t afford to find a home in this city."
Full-time Seattle public school teachers and instructional assistants enrolled in a teacher certification program are eligible for the loans. The program is available to teachers buying their first home or who haven't owned a home in three years, and it applies to homes priced up to $312,895 within the city limits. The 37-year loan does not require any payments until year 31 – instead the $45,000 loan can be paid back when the home sells. If the home is sold at year 30 or later, all interest is forgiven.
The city is committing $1.8 million to fund the program, which will help up to 70 teachers in the first year.
"The Mayor asked for this initiative to help make homes more affordable to a very critical sector of our workforce," said Adrienne Quinn, director of the Seattle Office of Housing. "The Teacher Homebuyer Program builds on a larger city effort to increase homeownership for all Seattle citizens through partnerships with organizations such as HomeSight, Habitat for Humanity and Parkview Services."
"Teachers are the cornerstone of our community's success," said Don Burton, CEO of Evergreen Moneysource. "We are proud to partner with the city to give teachers the support they deserve on the journey to owning their own home in the community they serve."
The average beginning teacher salary the Washington is $30,159, according to American Federation of Teachers' annual teacher salary survey.
"This city effort affords teachers the opportunity to buy a home in Seattle," said Wendy Kimball president of the Seattle Education Association. "That will promote retention of our members."
As part of the program, Evergreen is waiving traditional lender fees and reducing closing costs by an additional $500.
To keep the program going long-term, the city gets a share of the net proceeds if the home is sold within 8 years equal to the proportion of its loan to the original purchase price. For example, the city’s $45,000 silent second mortgage is equal to 15 percent of a $300,000 home. If home sells later for $350,000, the city gets $7,500, or 15% of the $50,000 profit. All net proceeds are then reinvested in the program to create loans for more teachers in the future.
To qualify for the new Teacher Homebuyer Program applicants must fall into the following household income ranges, which will be adjusted annually:
- 1-person household: $40,600
- 2-person household: $46,400
- 3-person household: $52,200
- 4-person household: $58,000
- 5-person household: $62,650
- 6-person household: $67,300
- 7-person household: $71,900
- 8-person household: $76,550
Visit the mayor's web site at www.seattle.gov/mayor. Get the mayor's inside view on initiatives to promote transportation, public safety, economic opportunity and healthy communities by signing up for The Nickels Newsletter at www.seattle.gov/mayor/newsletter_signup.htm.
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