Housing Preservation Program

The Department of Housing lends funds to eligible homeowners of single-family and duplex properties for repairs under its Housing Preservation Program.

Eligible Applicants
An owner-occupant’s gross annual household income must not exceed the lower-income level for Santa Clara County, adjusted for family size. Please refer to the Eligibility Criteria for eligible income levels.

Eligible Properties
Owner-occupied residential properties of one or two units located within the City of San José may qualify.

Loan Limits
Maximum loan amounts are $100,000 for rehabilitation of single-family dwellings and $110,000 for duplexes. Low- and very low-income applicants whose rehabilitation needs do not exceed $15,000 may qualify for funding through the Homeowner Grant Program. The City’s loan plus all other indebtedness secured by the property (first or second mortgages and any other liens) cannot exceed 95% of the value of the property (lower limits apply if the first mortgage has a variable interest rate).

Loan Terms

• Annual interest rates are 3% city-wide and 0% in Strong Neighborhood Initiative areas.
• The maximum term for the City’s loan is 30 years.
• No repayment of the City’s loan will be required until sale or transfer of the property. Borrowers can choose to make monthly payments if they so desire.

Security for the City's Loan
The borrower will be required to execute a promissory note and a deed of trust will be recorded against the property.

Eligible Improvements
As a condition of the Housing Preservation Program, all health and safety hazards must be addressed. Examples of eligible improvements include:

• Roof replacement
• Electrical system repair or replacement
• Plumbing repair or replacement
• Foundation installation or replacement
• Disabled accessibility
• Weatherization and energy efficiency upgrades
• Furnace and water heater replacement
• Seismic retrofit
• Bathroom and/or kitchen rehabilitation
• Floor covering and interior paint
• Exterior paint and other improvements as determined by Housing staff

Ineligible Improvements
Certain improvements go beyond the basic requirements for a safe and healthy living environment, and are not eligible for City loans. Examples include outdoor cooking facilities, adding appliances (such as microwave ovens, washers, and dryers), air conditioning, swimming pools, and spas.

Application Process
After initial inspection and verification of eligibility an application is provided to the homeowner. Once an application is complete and basic program eligibility has been established, the loan application will be considered for approval. The homeowner will be responsible for soliciting bids from contractors and determining the final scope of work. The repair work can begin after approval and completion of the loan closing process.

Affordability Restrictions
When the City’s loan exceeds a certain dollar amount per unit (equal to 25% of the median sales price of single-family homes in San José), the property will be subject to a 30-year affordability restriction that runs with the land. This restriction requires either that: (1) the property be sold only to an income-qualifying family at an affordable price, or , or (2) the City and the borrower share any increase in equity that accrues between the date of the rehabilitation loan and the date of sale. Refer to Eligibility Criteria for loan amounts that require an Affordability Restriction.

Contact Information:
City of San José
Department of Housing - Rehabilitation Programs
200 East Santa Clara Street
San José, CA 95113
Phone 408-975-4440
Michelle.Harrison@sanjoseca.gov

Programs : Emergency Home Repairs : Housing Preservation Program