The irony was that, according to online mortgage calculators, the $1300 we paid our landlord — on time, every month — would easily cover a mortgage on a decent-sized house in our neighborhood. So then why, after the real-estate bubble had burst, was it so difficult for even well-qualified buyers to purchase a home? Our current (or near-future) income might not put us at the top of the list, but we felt we were a reasonable risk.
In September 2010, a month after M started his new full-time job, he decided to look into whether we were now in a better position to meet the criteria for a home loan. He again called Community Housing Works. They suggested we sign up for an upcoming group-prequalification workshop, where loan counselors would go over current programs, then sit down one-on-one with participants to determine eligibility.
(The organization has since eliminated the group workshops. Now, after a Saturday at their homebuyer-education class, participants can schedule a one-on-one appointment with a loan counselor.)
The workshop began early on a weekday afternoon. Since M was too new at his job to feel comfortable leaving early, I did the first half alone. The night before, M packed up a manila envelope with W2s, 1099s, bank statements, check stubs, and tax returns for 2007, 2008, and 2009.
“Take notes,” he said. “I’ll be there as soon as I can.”
I made my way up to a large room on the sixth floor of the Price Charities building, three floors up from the Community Housing Works office. Four couples were already seated at three long tables; another couple would come in behind me. Throughout the presentation, I sat bleary-eyed while a bald man with dark eyebrows attempted to explain the available programs by jumping between a PowerPoint presentation and a stack of handouts.
M showed up toward the end, and then, because I had been the second to last to arrive, we waited while the two available loan counselors did their one-on-ones with the four couples ahead of us.
An hour and a half later, the man with the dark eyebrows introduced himself as Tony R. and sat down to look over our paperwork. While we filled out a Uniform Residential Lending Application, he flipped through W2s and taxes. He asked questions, took notes, made calculations, explained the equity shares, silent mortgages, and income criteria for different programs. Then he asked more questions, and made more calculations.
After an hour, he told us we might be in good shape.
With the $30,000 we’d saved for a down payment, if we came in at around 80 percent of the area-median income, we could probably qualify for a mortgage on a $300,000 home.
A Community Housing Works chart showed that, in City Heights, we would be eligible for up to $68,000 in down-payment assistance: $30,000 would come through the City of San Diego Redevelopment Agency — an amount that was forgivable after 15 years — plus $38,000 through Cal-Home. That loan would be made at 3 percent, with payments deferred for 30 years.
Chula Vista offered up to $70,000 on a shared-equity purchase, with a zero-percent-interest, 15-year silent mortgage — meaning that the loan would not be disclosed to the primary lender. This amount was available if we were interested in a foreclosed, bank-owned property (REO); we would receive up to $40,000 for a non-REO property. Here, too, additional funds for a down payment might be available through Cal-Home.
“But,” Tony said to M, “we might have a slight problem, because you haven’t been at your job for very long. Let me get back to you on that.”
I’d hoped for a, “Yes, you’re prequalified!” so we could get on with finding an agent and shopping for a house. M was just happy we hadn’t received an automatic “No.”
“We might as well get out there and see what we can find in our price range,” he said.
∗ ∗ ∗
The evening after our first meeting with Tony, we browsed the internet for houses for sale in City Heights and Chula Vista. The more we looked, the better Chula Vista looked: we’d be farther from the city’s center but have more space. M made a list of homes to check out, and that weekend, we drove to Chula Vista to shop.
“Listen,” he said, “we need to stick to a plan. If we start looking at houses in the $400s and $500s, we’ll want them. We have to be realistic.”
I agreed. I loved fantasizing about the big, refurbished Craftsman homes in South Park, but local foreclosure numbers brought me down to earth.
According to DataQuick, 13.9 out of every 1000 homes in San Diego were foreclosed on in 2010. (This figure is based on Trustee’s Deeds recorded for houses and condos at the county recorder’s office.) In Chula Vista, the number was almost twice that, 26.2 out of 1000 homes. In 2011, those numbers would be 11.9 for San Diego and 20.6 for Chula Vista. Lower, yes, but only slightly, and still very scary.
So of course the first thing we did was follow flags and signs to an open house in a neighborhood off of Olympic Parkway. The house was 3500 square feet and out of our price range. I wandered through rooms, opening closet doors, turning on lights, and contemplating paint colors, while M chatted with the agent hosting the open house about Chula Vista real estate.
The rest of that weekend, and the next, we peered in the windows of homes with lock boxes on the doors. We took the occasional tour of an open house. M didn’t like talking to the agents, whose first question was almost always, “Have you been prequalified?”
Every day we didn’t hear back from Tony from Community Housing Works, M’s enthusiasm diminished.
Two weeks after the workshop, M sent Tony an email. Tony responded that he’d get back to him by the end of the following week. This exchange was repeated a few weeks later, and again the following month. It went on for nine months. Tony kept the fire alive by periodically asking us to resubmit our 2007 taxes, our most recent pay stubs, and bank statements. He promised M repeatedly that we were days away from an answer.