What to know about LA's program for middle-income homebuyers

Middle-income homebuyers in Los Angeles are in a special quandary. Often, they make too much to qualify for any government assistance with loans, but don't earn enough to afford a home that meets their needs.

To help more middle-income earners buy homes, officials recently voted to pool $3 million in city funds with $1 million from the nonprofit agency Neighborhood Housing Services of Los Angeles County to bring back its Middle Income Purchase Assistance Program. The popular program stopped operating in 2008 after funding dried up.

Starting next month, a household of four with income of about $100,000 can qualify for a $75,000 zero-interest loan to help with the down payment or mortgage costs. 

TELL ME MORE ABOUT INCOME ELIGIBILITY

L.A. will accept applications from households of four making up to 150 percent of the area median income ($130,200). Before the change, the cap was 80 percent ($69,450).

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The city is broadening eligibility in hopes that it will help people live where they work. Gloria Torres, who oversees the city's Home Ownership program, recently described the program to council members.

"The program was very popular and assisted teachers, medical personnel, entry level law enforcement, accountants, social workers and mail carriers," Torres said. 

HOW LARGE A LOAN WOULD I QUALIFY FOR? 

That would depend on how much money you make. The more you earn, the less assistance you would receive. 

For example, a family of four making 150 percent of the area median income could get a loan of up to $50,000. A family of four making less than $69,000 could get up to $90,000. (The loan cap for low-income families used to be $60,000 but the city and Neighborhood Housing Services have also partnered up to raise the ceiling).

HOW MANY PEOPLE WILL THIS HELP?

Not many. The city is estimating roughly 50 middle-income families would benefit. The funding is likely to be used up before the program year is over, said Rushmore Cervantes, head of the city's housing department.

HOW MUCH DIFFERENCE WILL THIS MONEY MAKE? 

Matt Callahan, who works with first-time homebuyers at Springboard, a nonprofit lender, said a city loan coupled with other home assistance programs from the state or federal government could make a huge difference in buying a home, particularly one that matches the buyers' lifestyle.

"Instead of being a one- or two-bedroom now maybe they can purchase a three-bedroom. Instead of a townhome or condo, maybe a detached single-family home," Callahan said. 

HOW DO I APPLY? 

Start out by finding one of the lenders participating in the program at the website for the city's housing department or by calling 213-808-8800. The lender will help you pre-qualify for a mortgage.

WHY IS LA INVESTING IN HOMEOWNERS?

Just over a third of Angelenos own homes, the lowest rate of all the major metros. City officials say they want to encourage home ownership as a wealth-builder for residents. But homeowners also help contribute to the city's tax base and are believed by some, such as Lori Gay of Neighborhood Housing Services, to be good neighbors invested in their communities.