Loan-limit increase is a positive change

The Costa Mesa City Council is taking steps to narrow the housing

affordability gap enough to let a few first-time buyers pick up the

keys to home ownership.

Sitting as the city’s Redevelopment Agency, the council last week

approved revisions to the state-funded First Time Home Buyer Program.

Under the new plan, qualified buyers can apply for a $240,000 loan

toward the down payment of a home, provided it is in Costa Mesa and

doesn’t cost more than $608,000. That’s the median price for a

single-family residence in the city, a hard bit of evidence to

counter those who criticize Costa Mesa as a low-rent district.

Council members have the right idea in boosting down-payment loan

amounts and raising the cap on purchase prices. The revised numbers

are far more realistic in today’s housing market than the current

amounts of $40,000 for the loan and $515,000 for the cap.

Under those figures, only one loan was made last year compared

with up to a dozen four or five years ago. Small wonder. During that

time, median incomes rose by a modest 11% while home prices

skyrocketed 260%.

Prospective buyers must meet certain criteria, such as putting

down 3% of the purchase price themselves. They also cannot make more

than 120% of the area’s median income, which is $75,700 for a family

of four in Orange County.

City officials say the revisions will not be implemented until

September at the earliest. Meanwhile, it’s doubtful the city will be

making many -- if any -- loans under the current program.

Some might argue that even with the revised figures, not many

people will be able to benefit from the first-time buyer program. The

city generally receives from $700,000 to $1 million from the state to

fund it, and $1 million won’t buy many houses these days.

But to those who do qualify, this program could mean the world --

or more importantly, a home.