The Los Angeles City Council approved the expansion of the City’s First-Time Homebuyer Program by increasing the number of loans available to Angelenos and the size of the down payment assistance at each income level.
In the past 5 years, home prices have increased significantly in Los Angeles. According to data from Zillow, the typical home value in Los Angeles has gone up 48.19%, from $637,000 in February 2017 to $944,000 in February 2022. This has made it difficult, if not impossible, for low- and moderate-income families and young professionals to purchase homes.
Nationally millennials are not keeping pace with prior generations, per Investopedia, and this phenomenon is exacerbated by Los Angeles’ outsized typical home value, which is almost three times that of the nation’s.
The current program has three income brackets - Low Income, for individuals with incomes up to 80% of the Area Median Income (AMI), set by the U.S. Department of Housing and Urban Development (HUD); “Moderate Income Purchase Assistance (MIPA) 120”, for individuals between 81% to 120% AMI; and “MIPA 150”, for individuals between 121% to 150% AMI.
The newly expanded program increases the dollar amount of purchase assistance loans from $90,000 to $140,000 for Low Income Purchase Assistance (LIPA), from $75,000 to $115,000 for those in the MIPA 120 range, and from $50,000 to $90,000 for those in the MIPA 150 range.
With the new funding, the new loan ceiling level, and with additional SB 2 funds this year, the number of loans for moderate-income homebuyers will increase by 800% for Angelenos.
The funds will be disbursed in the 2022-23 fiscal year. Learn more about the City’s First-Time Homebuyer assistance programs here.