With the average home price in the Tahoe Basin and Truckee hovering around $1 million — or in the case of Incline Village, surpassing $1.5 million — it can be nearly impossible for local residents to purchase market-rate homes. Fortunately, local governments and organizations have recognized the dilemma and have created programs in recent years to help locals realize the dreams of home ownership. While this help is sorely needed, the rising costs of homes and low inventory still make it challenging for area families and workers to take advantage of these programs.
Town of Truckee
In March, the Truckee Town Council approved its first major homebuyer assistance program, the Below Market Rate Housing Program. Modeled after the much-imitated Vail InDEED, Truckee’s program creates a deed-restricted inventory of homes that only income-qualified applicants can participate in. Income requirements limit the program to households that make a maximum of 245% of area medium income, which was $92,400 for a family of four in 2021. This means that a family of four could make up to $226,400 to qualify for the program, according to Assistant to the Town Manager Hilary Hobbs.
“It’s a pretty high income,” Hobbs said. “It’s a pretty tough nut to crack to find how to structure a program to access homes where the median home price is pushing $1 million.”
The program also specifies that the purchaser cannot have liquid assets, such as stocks, cash, or equity in another property, that exceed 30% of the sale price, and that at least one member of the household is a full-time employee within the Tahoe Truckee Unified School District boundaries, or has a job offer within that area.
“The intent is to support our local workforce and local employers who have trouble filling positions due to the lack of housing,” Hobbs said.
As part of the Below Market Rate Housing Program, the town offers qualified candidates up to 16% of the sale price, capped at $150,000, to purchase a deed restriction on the property. The deed stays with the property for 55 years, and if the home sells before that time, the 55-year term renews.
The Below Market Rate Housing Program will launch this summer.
The town currently has 12 deed-restricted for-sale homes at Stoneridge Condominiums, Spring Creek, and Coyote Run II, which were created under development agreements as part of the town’s inclusionary policy.
Like Truckee, Placer County’s Workforce Housing Preservation Program, which started last July, was inspired by Vail InDEED. The county pays buyers 16% of the purchase price up to $150,000. This, coupled with the 4% the homebuyer must contribute to the down payment, eliminates the need for mortgage insurance. In exchange, Placer County places a deed restriction on the home for 55 years.
Placer’s program has the same income requirement as Truckee’s — 245% of area median income, which was $91,100 in 2020, according to the U.S. Department of Housing and Urban Development — and candidates must work within the TTUSD boundaries.
According to Placer County Senior Management Analyst Emily Setzer, 20 people in Eastern Placer County have applied and qualified for the program, but so far none have been able to buy a home in Tahoe.
“As you can imagine, since it launched right at the height of the market, we have had problems with buyers being able to find homes — even with the 16% [assistance] — that they can afford, and there has been low inventory as well,” Setzer said.
Because of that, the county is debating modifying the program by eliminating income restrictions and having only the local worker criteria, and potentially creating a cash-offer program. According to Setzer, 40% of homes sold in the Sierra Board of Realtors district in 2021 were cash offers.
The county also has a First Time Homebuyer Assistance Program, which is open to households that make 80% of area median income ($72,500 for a family of four). The program provides flexible second mortgages to help families purchase their first homes in the unincorporated areas of Placer County. Due to the high cost of homes in North Tahoe, only 12 households have been able to take advantage of this program, the last one in 2011, according to Devon McNally, an associate planner with Placer’s Community Development Resource Agency.
The Martis Fund, which was founded in 2006 by the Martis Camp developers, Mountain Area Preservation, and Sierra Watch, created its Down Payment Assistance Program in 2016. The program originally offered a loan of up to 10% of the purchase price with a cap of $50,000, but the organization recently increased both the percentage and dollar amount.
“With the price points and what’s happening [in the housing market], we deemed it necessary to increase to 15% and $75,000,” said Tom Murphy, Martis Fund board president.
The program has an income restriction of 180% of area median income, which equates to roughly $150,480 for a family of four, and participants must work within TTUSD boundaries. All principal and interest payments on the down payment assistance loans are deferred until the home is sold.
DPAP does not currently include a deed restriction, although if a homeowner sells his or her house, the buyer has to meet the income qualifications. This could change in the future.
“We are trying to find ways to keep the inventory in perpetuity,” Murphy said. “We are working with Placer County and Truckee to have deed-restricted programs and other restriction caveats.”
Thus far, Martis Fund has invested over $2.4 million in DPAP and helped 54 families, with an average loan amount of $41,378.
El Dorado County
The El Dorado County First Time Homebuyer Loan Program assists low-income families with second mortgage financing for the purchases of their first homes. The program, which is only available in the unincorporated areas, offers a deferred-payment, second-mortgage loan for a 30-year term at 3% interest to qualified borrowers. Income eligibility is 80% of area median income, which is $83,710.
“The real advantage is that the payments are deferred for 30 years, basically the term of the first mortgage,” said C.J. Freeland, an administrative analyst with El Dorado’s Housing, Community, and Economic Development Program.
The program provides gap financing, meaning it makes up the difference between the loan amount the buyer qualifies for and the sale price of the home. Homebuyers are required to put 2% of the sale price as a down payment.
However, because El Dorado competes for California state funding for the program, it has only been able to offer the loan program intermittently since 2002. The last time it received funding and was able to provide loans was in 2019. The county has assisted 62 low-income households — two in Tahoe. The county currently has a waitlist of 50 households for the homebuyer loan program.
Washoe County does not offer any homebuyer assistance programs, but the State of Nevada does. The Home Is Possible program began in 2014 and offers up to a 4% loan of the sale price for down-payment and closing costs. The loan is a no-interest, no-payment, pro-rated, forgivable loan over three years. Out of the almost 28,000 families that have participated in Home Is Possible, only two were in Incline Village.
“The prices of homes are so high in Washoe County that it has made it difficult for people to qualify,” said Dwight Pace, homebuyer programs supervisor with the Nevada Housing Division. “It’s far beyond what most first-time homebuyers can afford.”
According to Pace, last summer Washoe was the number one county in the country for cash sales.
“This makes it difficult for residents looking to buy and finance,” Pace said.
Nevada’s other housing program, Home at Last, hasn’t been much help to Incline Village residents either. Started in 2006, the program offers a similar down-payment loan as Home Is Possible with a maximum income limit of $150,000. Out of the 10,000 households in the state who have used the program, only one has been in Incline, according to Katie Coleman, spokesperson for the Nevada Rural Housing Authority.