Placer County revives homebuyer program that eases path to ownership
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- Placer County reinstates homebuyer aid with 100K to support first-time buyers.
- Applicants must meet income and other eligibility criteria to qualify.
- Assistance comes as a 3% interest silent second loan, due at sale or end of term.
Placer County has revived its down payment assistance program, offering up to $100,000 to help first-time homebuyers compete in one of the priciest housing markets in California and the nation.
With $2.6 million in funding secured from federal and state sources, the program aims to help low- and middle-income residents plant roots in the fast-growing county.
At a May 13 meeting, the Placer County Board of Supervisors approved updates to the program required by state and federal authorities before funding could be accessed. The monies come from the federal HOME Investment Partnership Program and Community Development Block Grant (CDBG), as well as California’s Permanent Local Housing Allocation (PLHA) program.
Darius Brown, a housing specialist with the county, said that this program was so popular that some residents already had submitted interest forms in hopes that it would return. So far, 29 households have submitted documentation for screening.
“Since the program went live, I have been completely slammed with people seeking information,” Brown said. “Everybody definitely wants to participate.”
He recommended that any interested resident attend the May 30 virtual homebuyer webinar.
To qualify for this down payment assistance, applicants must earn no more than 150% of the area median income — about $181,200 for a family of four. Housing Manager Nikki Streegan described the program as a crucial tool to “bridge the gap that many homebuyers have experienced in trying to gain entry into the Placer County home market.”
Who’s eligible for this down payment help?
To qualify, applicants must meet the following conditions:
▪ Be pre-approved for a first mortgage loan.
▪ Contribute at least 1% of the home’s purchase price from personal, non-borrowed funds.
▪ Purchase a home located in the unincorporated areas of Placer County.
▪ Be a first-time homebuyer, defined as someone who has not owned a home in the past three years, or
▪ Be a displaced homemaker who has not worked on a full-time basis for 12 consecutive months in the past two years, or
▪ Be a single parent who is unmarried or legally separated from their spouse and has custody or joint custody of a minor, or
▪ Own a home not fixed on a permanent foundation or a home out of compliance with local, state or model building codes that would cost more to bring in compliance than it would to build a permanent structure.
This down payment assistance comes as a loan
Applicants will be offered a silent second mortgage with a 3% annual interest rate and no monthly payments, due only when the home is sold or the affordability period ends — 15 years for HOME and CDBG funds, and 30 years for PLHA.
The down payment assistance comes in the form of a “silent second loan.” It’s called silent because, although it accrues interest— 3% annually — it doesn’t require any monthly or annual payments during the life of the loan. There’s also no balloon payment due mid-way.
Instead, the balance comes due only when a mandated affordability period ends — 15 years for HOME and block grant funds, and 30 years for PLHA — or when the buyer sells, transfers the home or stops using it as a primary residence.
These terms are intended to keep monthly housing costs within 30–35% of a household’s income.
Over time, the interest compounds. So for a $100,000 loan, that 3% interest adds up: if left unpaid, the total repayment could rise to around $196,000 after 15 years. That said, homeowners can choose to pay the interest annually to avoid that additional liability.
“If I did this program and was receiving funding, I would just pay at least the interest each year,” Brown said. “That way, when I get ready to sell or when the affordability period ends, all I have to pay back is the $100,000 I originally borrowed.”
If a homeowner decides to sell before the end of the affordability period, they’ll be required to sell to another qualified low- or moderate-income buyer—unless the property sits unsold for six months, at which point it can be listed at market rate.
Addressing CA’s low home ownership rate
The program returns at a time of renewed focus on home ownership inequality in California. A recent report by the nonpartisan Public Policy Institute of California emphasizes that home ownership is one of the most effective means of building intergenerational wealth.
Yet, PPIC researchers said, California has the second-lowest home ownership rate in the nation, with significant racial disparities. As of 2023, the Latino home ownership rate stood at 45.9%, and Black home ownership lagged further behind at just 36.6%, compared to 64.4% for white households.
Cost burdens exacerbate the issue. The PPIC reports that 63.3% of Latino renters and 56.1% of Black renters spend more than 30% of their income on rent—making it extremely difficult to save for a home. Income disparities compound the challenge: median income for white households in California is 57% higher than for Black households and 34% higher than for Latino households.
National research from the Urban Institute further underscores the need for targeted support. First-generation homebuyers—many of whom are people of color—often lack the intergenerational wealth needed for a down payment.
While a third of first-time buyers receive financial help from family or friends, this is far less common among those whose parents never owned a home. The median renting family holds only $10,400 in wealth, compared to nearly $400,000 for the median home-owning family.
“Even moderate-income households have been priced out in many markets,” the Urban Institute notes, pointing to high interest rates and inflated home prices. Programs like Placer’s offer a rare chance for these households to move from renting to ownership.
Brown emphasized that better prepared buyers are, the more likely they will be to secure funding.
“It’s going to be first come, first serve for the folks that submitted the interest form who are actually ready to buy,” he noted. That means having pre-approval from a lender, income documentation, working with a real estate agent and making an offer.
This story was originally published May 25, 2025 at 5:00 AM.
