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On the market: Workforce housing

April 3, 2010 |  6:39 am

Like many Southlanders, Bryan Bostic thought about owning a home.

So in June 2007, when the state median home price was $502,000, Bostic started to explore the housing market. By December, he was reviewing other options.

“I had given up hope,” Bostic, 28, recalls. “I thought I would look for an apartment.”

Bostic’s mother, meanwhile, refused to give up. Her online search yielded a phone number for Enterprise Home Ownership Partners Inc., a subsidiary of Columbia, Md.-based nonprofit developer Enterprise Community Partners, offering for-sale workforce housing to qualified candidates.

EHOP started developing homes for first-time buyers in conjunction with HUD’s Asset Control Area program in 2000. In January 2005, L.A.’s small lot subdivision ordinance enabled EHOP and other developers to target the needs of middle-income “workforce” households earning 80% to 120% of an area's median income ($62,100 for L.A. County families with four people in 2009), who want to live close to work, by building subdivisions with residences as small as 600 square feet in commercial and multifamily residential zones.

Workforce housing isn't new. For years, universities have used affordable for-sale housing to recruit and retain staff members and professors moving from state to state for years. But teachers aren’t the only people who see its value.

Since 2000, EHOP has rehabbed and sold about 500 single and multi-family affordable units in Los Angeles and currently has 20 units in four L.A. locations priced from $315,000 to $4 00,000. Eligibility is limited to first-time buyers and based on income levels. Buyers are pre-approved with a Los Angeles Housing Department certified lender and must complete a HUD-approved home-buyer education course.

“There is a preference toward hometown heroes -- firefighters, nurses, teachers and law enforcement officers,” says Jeff Schaffer, a vice president for Enterprise Community Partners in Southern California.

Bostic began the qualification process in January 2008. On Dec. 22 of that year, Bostic, who grew up in Watts and earns about $60,000 annually as a county employee, gave up the room he rented in his brother’s home and closed escrow on a $400,000, 1,375-square-foot, three-bedroom, 2 1/2-bathroom environmentally “smart” L.A. townhouse with solar electric panels and other green features.

To fund the purchase, Bostic used savings, got a traditional mortgage and qualified for a $75,000 moderate-income loan (a "silent second") through the housing department. The loan is due in 30 years or upon sale with principal and shared appreciation -- the percentage of the LAHD loan divided by the property purchase price -- or 18.74% in Bostic’s case.

In addition, Bostic got a $15,000 loan from the California Housing Finance Agency under the High Cost Area Home Purchase Assistance Pilot Program. That program was suspended in 2009.

Funding options can be complicated. A silent second sounds great in theory but could limit your ability to secure credit with equity lenders down the road. So understand options, eligibility requirements, terms and conditions, and potential pitfalls.

An EHOP Scattered Sites loan, for instance, provides each eligible applicant -- a single family earning up to $44,400 or up to $63,450 for a family of four -- up to $90,000 in city-funded low-income loans in conjunction with the LAHD.

LAHD says the program has funded four loans in the last 12 months and has earmarked funds for a total of 18 eligible first-time buyers. Individual loans, along with principal and shared appreciation, are due in 30 years or upon the sale of the property, title transfer, first-mortgage repayment or when the borrower no longer occupies the home as a primary residence.

These purchase assistance loans come from federal funds provided by HUD to LAHD through a community development block grant.

In addition to complex financing programs, many workforce housing properties have rigid resale rules or deed restrictions that discourage speculators. For example, many programs limit appreciation by requiring buyers to live in the home for specific periods before selling or stipulate resale to other moderate-income buyers. So it is important to read the fine print.

Jane Blumenfeld, acting deputy director for the Los Angeles Department of City Planning, says local and state governments have encourage developers to deliver affordable units along with traditional market units with regulatory incentives such as fee waivers, reduced parking requirements, modified zoning, expedited permitting, tax credits and funding options. In addition, density bonus programs enable developers to build more units than would normally be allowed and deviate from some zoning rules.

New projects reflect this trend.

National developer Brookfield Homes, in conjunction with the Long Beach Housing Development Co., will break ground on the Coronado, a workforce housing community in Long Beach, on April 21. At the corner of Atlantic Avenue and 21st Street, the Coronado will feature 48 townhouses (two- to four-bedrooms), market priced from about $350,000 to $450,000 and catering to workers earning $45,000 to $75,000 annually.

The project is targeted for completion in 2011. However, John O’Brien, vice president of urban development for Brookfield Homes Southland Inc. in Costa Mesa, anticipates that 14 homes will close escrow by the end of 2010.

“Qualified buyers will be able to receive down payment and mortgage assistance,” O’Brien says.

For many middle-income families, workforce housing programs provide the extra push they need to enter the ranks of homeowners.

“Workforce housing isn’t low-income housing,” says Lisa Lee, who has begun looking into workforce housing that she could afford on her annual salary of about $42,000. “It’s just a great start. And everyone needs a great start regardless of your economic background.”

Lee, 38, a teacher at USC’s children’s center, rented an L.A. apartment for 12 years. Recently, the single mother starting longing for more space for her daughters, ages 2 and 5.

By taking the required 12-hour HUD approved homebuyer education course, securing a traditional mortgage and a $90,000 LAHD loan, Lee hopes to own a $400,000, 1,375-square-foot townhouse with three bedrooms and 2 1/2 bathrooms.

Lee also applied for the USC Neighborhood Homeownership Program, a subsidy that provides eligible school employees with monthly payments totaling $50,000 or 20% of the home’s purchase price, whichever is less, over a seven-year period. For Lee, the subsidy will add about $650 to her monthly income.

With the added income, a silent second and a $1,350 mortgage, Lee says her monthly home loan could end up costing less than her current monthly rent of $950.

“When I looked in the area, I almost gave up on the idea that I could live in the area and own a home,” Lee says. “But these homes are brand new and affordable.”

Funding options:

The California Homebuyer’s Downpayment Assistance Program can provide a deferred payment, simple interest-rate junior loan (a silent second) available for up to 3% of the home’s purchase price or appraised price, whichever is less, and due upon sale of the property or refinancing or when the loan is fully paid. Income limits and restriction vary by household and county. For more information, e-mail

The Cal30 Conventional first mortgage is a fixed rate, fully amortized 30-year loan with a maximum loan-to-value of 95% and a maximum total combined LTV of 102%. Income limits and restriction vary by household and county. For more information, e-mail

HUD’s American Dream Downpayment Initiative provides low-income first-time earners (single family: $44,400; family of four: $63,450) with a city loan equal to 6% of the purchase price or up to $10,000, whichever is greater. Each state receives ADDI funds proportionate to the percentage of the national total of low-income households residing in rental housing in the state, as determined by the most recent available U.S. Census data. Funds are issued by the Los Angeles Housing Department and may be used for down payment and closing costs. The loan is due on sale, title transfer, first mortgage repayment or in 30 years as a balloon payment.

The Mortgage Credit Certificate is a federal tax credit (15% or 20% of the mortgage interest, depending on property location) that helps low and moderate earners qualify for a higher first mortgage and reduce federal income tax. The program was awarded $26.6 million in the fall of 2009 and has funds available.

Contact these regional developments and resources to inquire about availability of for-sale workforce housing, get online updates or add your name to an interest list.

Los Angeles County:

*Enterprise Home Ownership Partners Inc.

*Urban Pacific Group of Cos.,

*Brookfield Southland Homes, (888) 565-6279

*Coronado, Long Beach. This community is not actively selling, but information on the product offering, pricing and an interest list application is available online.

Orange County:

*Brookfield Southland Homes, (888) 565-6279

*Colony Park, a green community, is actively selling , (800)726-1512.

San Diego County:

* The Centre City Development Corp. features information about affordable rental housing and for-sale workforce housing in downtown San Diego. Visit and select the Affordable Housing Directory or call (619) 235-2200.

Ventura County:

* Cabrillo Economic Development Corp. (805) 659-3791, or e-mail

Here are a few workforce housing options on the market:

3375 California Avenue being built

3375 California Ave., El Monte

Listed at $350,000 at, this three-bedroom, 2 1/2-bathroom single-family home, set to be move-in ready this month, built by Urban Pacific Construction, features 1,398 square feet, a pool and attached direct-entry two-car garage and financial assistance for qualified buyers through El Monte. For more, visit the Rio Hondo Community Development Corp. or call (626) 401-2784.

11020 Amador St., El Monte 

11020 Amador St., El Monte

A Rio Hondo CDC sister property to the one mentioned above is listed at $350,000. The three-bedroom, 2 1/2-bathroom single-family home has 1,400-square-feet and financial assistance for qualified buyers through El Monte. Set for completion this month by Urban Pacific Construction. For more, visit the Rio Hondo Community Development Corp. or call (626) 401-2784.

255 E 67th st 

255 E. 67th St., L.A.

Listed at $345,000 at Trulia, this townhouse features three-bedrooms and 2 1/2-bathrooms in 1,320 square feet of new construction. The “smart” home features a tankless water heater, a solar-electric system, energy-efficient lighting, appliances, a direct-entry garage and down-payer assistance for qualified buyers. The building features three additional, identical units also for sale (253 E. 67th St., 251 E. 67th St., and 257 E. 67th St.) at $345,000. Visit for more information.

609 E 118th Street 

607 E 118th St., L.A.

Listed at $329,000 (a $16,000 reduction) at Trulia, this three-bedroom, two-bathroom condominium in 1,350 square feet built in 2009 has recessed lighting, energy-efficient appliances, a tankless water heater, attached direct-entry garage, ceiling fans in the bedrooms and down-payer assistance for qualified buyers. The building features one additional, identical unit for sale (609 E.118 St., L.A.) at $329,000. Visit for more information.

11718 Avalon Blvd. L.A.

11718 Avalon Blvd., L.A.

Listed at $329,000 at Trulia, this three-bedroom, two-bathroom 2009 townhome has 1,350 square feet built, central heating and down-payer assistance for qualified buyers. The building features two additional, identical units also for sale (11720 Avalon Blvd., L.A., and 11722 Avalon Blvd., L.A.) at $329,000. Visit for more information.

-- Michelle Hofmann