A home loan program for teachers who commit to teach in a so-called "low-performing school" for five years has just gone statewide.
On May 8, the Extra Credit Teacher Home Purchase Program - previously operating in six California counties and the city of Los Angeles - was expanded to reach teachers working anywhere in the state. The California Debt Limit Allocation Committee (CDLAC), chaired by State Treasurer Philip Angelides, awarded $15 million to the California Housing Finance Agency (CHFA) to run the statewide component of the teacher home loan program, bringing total funding for the program to $164 million over two years. It is anticipated that the Extra Credit program will serve more than 4,000 teachers through 2004.
"Everyone wins under the terms of this contract," says Angelides. "The teacher and his or her family can afford their first home, and the school is guaranteed a competent, credentialed teacher."
The program provides eligible teachers, principals, vice principals and assistant principals with an annual tax credit of approximately 15 percent against their mortgage interest payments (Mortgage Credit Certificate Program) or a reduced interest rate mortgage loan (Mortgage Revenue Bond loan).
Mortgage Credit Certificate: For a family with a $150,000 mortgage bearing an 8 percent interest rate, the credit would be approximately $37,000 over the life of the mortgage - an annual savings of up to $1,800. The credit would be highest in the early years of the loan, when there is more interest paid by the homeowner.
Mortgage Revenue Bond: For a family with a $150,000 mortgage loan, the mortgage interest rate would be reduced by approximately 1 percent, which would result in savings of approximately $37,000 over the life of the loan.
Teachers must be fully credentialed and employed full-time in a low-performing school in the subject and grade level authorized by his or her credential.
They must agree to serve for a minimum of five years in a K-12 public school ranked in the bottom 30 percent based on the most recent Academic Performance Index (API).
They must also be first-time homebuyers.
Eligible teachers living in any of nine local communities that provide down payment assistance may apply locally (cities of Oakland and Los Angeles, and the counties of Los Angeles, Orange, Sacramento, San Bernardino, San Francisco, Santa Clara and Santa Cruz). Teachers living elsewhere in the state may apply for the program through the California Housing Finance Agency.
For more information, visit the state treasurer's Web site [www.treasurer.ca.gov] and click on "Boards and Authorities" and "California Debt Limit Allocation Committee."