Newark council approves $3 million first-time homebuyer program with shared-appreciation loans

The Newark City Council on May 14 approved a staff-recommended first-time homebuyer program that will use $3,000,000 from the cityhousing impact fee fund to provide direct financial assistance to qualifying first-time buyers.

City housing staff and contractor Hello Housing described a program designed to close upfront down-payment and closing-cost gaps that keep moderate-income households from buying in the Bay Area. Michael Coolum, the cityhousing policy and programs manager, told the council that staff recommends increasing the allocation from $2 million in the affordable housing work plan to $3 million "which would support a minimum of 15 households." The council approved a budget amendment and directed staff to implement the program.

Hello HousingPresident Jennifer Duffy said the program will emphasize outreach, mandatory counseling and ongoing compliance monitoring. "The single biggest obstacle standing in the way of many families and homeownership is the upfront cost of coming up with a down payment," Duffy said. She outlined a program that combines outreach, underwriting support, loan closing administration and post-closing monitoring.

Under the proposed guidelines, assistance takes the form of a silent second deferred-payment loan with a dual repayment option: the cityshare would be repaid at either a proportional share of appreciation or a 3% simple interest calculation, whichever yields a larger payment at sale or refinance. Maximum assistance would be tiered: up to $200,000 for households earning 100% of Area Median Income (AMI) or less, and up to $150,000 for households earning between 100% and 120% of AMI. A required personal down payment would range from 0% to 3% to reduce the upfront barrier to application.

The program prioritizes applicants who live or work in Newark. Duffy described a two-lottery system: applicants meeting the city preference are placed in a priority lottery; remaining applicants enter a general lottery. She said the process will use randomized identifiers and documented ranking to ensure fairness.

Council members asked about asset tests, exceptions for inherited property and whether the city could expand funding. Several speakers, including Councilmembers, praised the shared-appreciation approach as a way to sustain the program over time. One motion to increase the allocation to $4 million failed; the staff recommendation of $3 million was then approved.

Action and next steps: council adopted the resolution approving draft program guidelines, approved the $3,000,000 budget amendment for direct assistance and authorized the city manager to enter agreements with eligible homebuyers. Staff and Hello Housing will prepare outreach and application materials and return periodically to report results.

Vote: council approved the staff recommendation (motion to adopt staff recommendation) by roll call; the motion passed and the council directed staff to implement the program and begin marketing.