MONTEREY In less than two weeks Monterey will be submitting an application for $550,000 to help local residents with a down payment for a home.

Its one of many tools the city is using in an attempt to meet a woefully inadequate housing stock. The dearth of housing, particularly affordable housing, has led the city to implement creative ideas to get more housing built.

Facing a statewide housing crisis, the California Department of Housing and Community Development issues housing construction expectations in the form of Regional Housing Needs Assessments for every jurisdiction in the state for set periods. Montereys Needs Assessment stands at 650 units before the beginning of the next cycle at the end of 2023.

The city is not on pace to hit those numbers and at the end of the current cycle, those assessments will only become greater in number.

One of the things the city is doing to try and find housing for its workforce is assisting with mortgage down payments. By Feb. 17 the city will have applied to the CalHome Program, a part of the same agency that administers the housing needs assessment, said Grant Leonard, a housing analyst for the city, who heads up the Down Payment Assistance program.

The Department of Housing and Community Development has made $57 million available for the CalHome Program. Monterey will be applying for a grant of $550,000. After $50,000 is allocated for administrative costs, a half-million dollars will be available to make loans for several elements that will help residents buy a home, Leonard said.

Homebuyers will have 15 years to repay the loan. While $500,000 may seem like a lot, with todays housing prices it could be chewed up fairly quickly. The median-priced home in Monterey County stood at $660,000 in September 2019. In the city of Monterey, that number is significantly higher.

Assuming a 20% down payment, a home buyer will need to come up with $120,000 to get into a house. The maximum amount of a down payment loan is $50,000, leaving the home buyer some $70,000 short of a full 20% down payment requirement. If every home buyer took out the maximum, there would be enough for 10 down payments.

The First Time Homebuyer Mortgage Assistance program is just one of a half-dozen programs the grant money can be used for, such as the Owner-Occupied Rehabilitation Assistance and technical assistance for self-help housing projects.

The City Council passed a resolution at its Feb. 4 meeting authorizing its staff to prepare an application. Leonard said the city should hear back sometime in the spring and if the application is successful the city could begin the program at the beginning of the 2020-2021 fiscal year beginning July 1.

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Monterey to help home buyers with down payments - Monterey Herald