After losing her home in June 2009, North Long Beach resident Melvalyn Priddie is ready to possibly purchase a home again.
“It’s just been a constant building, building, building, since then, working here, working there, and just trying to get back on track,” Priddie said. “It just takes that long.”
For Priddie, who is a tax preparer, and her husband, who works with Los Angeles Unified School District, cost is the biggest barrier—and the city’s new homebuyer assistance program, set to open to applications in the coming months, could offer some much-needed relief.
“We’ve seen the prices in Long Beach are just out of control,” said Priddie, who has also begun to explore manufactured homes as a more affordable alternative.
Although she has lived in Long Beach since the ‘90s, her family may even consider moving elsewhere due to challenges finding an affordable home in Long Beach, she said.
Through the city’s new First-Time Homebuyer Assistance Program, made possible through Long Beach Recovery Act funds, 100 eligible families will receive up to $20,000 in down payment and closing cost assistance, in the form of a grant, rather than as a loan or mortgage service.
While home costs are still very high, rising interest rates have made getting mortgage assistance even more difficult for low- to moderate-income homebuyers, and hopefully this assistance will provide some needed relief, said Meggan Sorensen, housing development officer for the city of Long Beach.
“We are hoping to at least take off the burden for those who have a down payment saved but don’t realize how much closing costs are going to be, or for those who thought that they were in the market, but now because of rising interest rates thought that homeownership was no longer an option,” Sorensen said.
While the city launched its website in October, with applications expected to open in “early 2023,” a date has not yet been announced regarding when applications will be open.
However, city officials expect the application to open around the spring of this year.
In the meantime, the city plans to host informational sessions to familiarize prospective buyers with the eligibility requirements as well as with the process. Dates for those sessions are expected to be released in the coming weeks, city officials said.
The program’s eligibility requirements include a household income that does not exceed 150% of the Los Angeles County Area median income, meaning a family of four could earn an income of up to roughly $136,650.
Additional eligibility requirements include holding U.S. citizenship or permanent residency, along with being a first-time homebuyer, which the city defines as someone who has not owned a home in the past three years.
Those applying must also be first-generation homebuyers—people whose parents or guardians never owned a home during the homebuyers’ lifetimes or who lost their home to a foreclosure or short sale and do not currently own a home.
Anyone wishing to apply must also live within a federal Community Development Block Grant designated census tract in Long Beach, or areas where at least 51% of its residents are low- to moderate-income, which represents about half the city, primarily in North, Central and West Long Beach—although grant recipients may purchase a home anywhere in Long Beach, noted program specialist Stephanie Harper.
“It’s primarily our communities of color within Long Beach and folks who traditionally have been excluded from owning a home,” Harper said. “We really wanted to make sure that this support is geared towards those who need it the most.”
Additionally, applicants must be pre-approved and be working with a real estate agent, but they won’t be eligible if they have already opened escrow on a home at the time of applying.
After submitting an application, applicants will receive a preliminary program qualification notice, so they can move forward with finding a home and getting an offer accepted, Harper said.
Once buyers open escrow, grants will be awarded on a first-come, first-served basis to applicants who have been pre-qualified, and disbursed directly to escrow. Buyers that receive a grant will see the funds within 30 days of opening escrow, according to city officials.
While prospective homebuyers may be hesitant to open escrow on a home without knowing whether they will receive funding, representatives from Long Beach’s Housing and Neighborhood Services Bureau said the grants will still be helpful in covering any unforeseen closing costs or to buy down the interest rate without reducing the buyers’ down payment.
“We believe that the City will be helping many residents who could not otherwise close escrow and get keys to their new homes without us,” the bureau said in a statement.
Interest in the program is high—about 2,600 people have filled out the interest form on the city’s website, Harper said.
“I think it’s important from an equity perspective to help spread the opportunity to more households for homeownership,” said Sorenson.
Depending on the success of this program, and what funds become available in the future, more assistance programs could be offered to Long Beach residents.
While the program has the potential to be beneficial for low- to moderate-income families, homebuyers of all income brackets are facing immense barriers when it comes to home buying currently, said Realtor and past president and director of the Greater Long Beach Board of Realtors, Phil Jones.
Perhaps the largest issue is a lack of inventory—in 2022, there were 736 fewer listings that came on the market in Long Beach than in 2021, according to Jones.
“That has just continued to exacerbate the inventory issue for buyers across all strata,” Jones said.
For low- to moderate-income buyers, that situation is even more complicated, since inventory is even more limited for people with strict price restrictions, said Jones.
Housing affordability is a challenge statewide and across the country, although California has particular issues with housing development, where costs to both get building plans in place and to start construction are high, Jones said.
“That, of course, adds to the overall cost of housing, which further prices low- to moderate-income families out of the market,” Jones said. “It increases the cost of building new construction to the point where it’s no longer affordable.”
Nationally, experts estimate that the housing stock is as much as 6 million units below what the population needs—but in California, that number is 3.5 million, Jones said.
“We make up more than 50% of the housing shortage in the country,” Jones said. “It’s a serious issue.”
Jones noted that there are measures being taken within Long Beach, including efforts to convert former commercial and retail housing into affordable housing.
However, many of the city’s initiatives, which have been largely concentrated in Downtown, are limited to renters, and minimal units are allotted to affordable housing.
“I think it’s the ‘not in my backyard’ pushback,” Jones said. “If the public has enough of these ‘not in my backyard’ people, and there are overwhelming numbers of them, then the council people don’t have the political fortitude to push for it. I hope that will change but I am not optimistic that that will.”
High labor costs and supply shortages have only compounded the issue, as have increasing interest rates, which—while stable over the past two months—are expected to go up to 7%, if not higher, over the course of this year, Jones said.
“If interest rates increase, it does impact the ability of buyers to buy. It shrinks their buying power,” Jones said. “It adds to the list of challenges that first-time homebuyers find.”
At the state and local levels, Realtor associations are pushing for the ability of low- to moderate-income families to start building generational wealth through homeownership, Jones said.
While programs such as the homebuyer assistance program are important, what’s more important is reducing the obstacles to creating housing, Jones said.
“The Homebuyer Assistance Program is good—I don’t think it’s nearly enough,” Jones said. “Twenty thousand dollars for approximately 100 families will help to a degree, but . . . we have to really continue to work with our local council people and the local city employees, the bureaucrats, in finding easier, less expensive ways to build homes.”
For Priddie, she is cautiously optimistic, and looks forward to learning more about the requirements of the city’s program and if it would be feasible for her and her husband.
“I think there should be an abundance of first-time homebuyer programs,” Priddie said.
More information about the Homebuyer Assistance Program is available online and by calling the Long Beach Resource Line at 562.570.4246 between 9 a.m. and 4:30 p.m. on weekdays.