DATE: 02/18/2026
TO: Honorable Mayor and City Councilmembers
FROM: Housing and Neighborhood Services Department
TITLE: CALHOME/HOME FIRST-TIME HOMEBUYER PROGRAM
RECOMMENDATION
title
Staff recommends that City Council: Appropriate $500,000 in available CalHome funding to be used with the existing $500,000 in HOME Investment Partnership funds currently held by the City for continued use in the City of Oceanside's First-Time Homebuyer Program (FTHB Program) as part of the Fiscal Year 2025-26 Operating Budget.
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BACKGROUND AND ANALYSIS
Since 2001, the City of Oceanside's CalHome Program has assisted lower-income families in achieving homeownership by providing down payment assistance (DPA) for the purchase of single-family homes for owner occupancy. The program utilizes two distinct funding sources: 1) CalHome, state funding from the California Department of Housing and Community Development; and 2) HOME Investment Partnership Program, federal funding from the U.S. Department of Housing and Urban Development (HUD).
The CalHome/Home FTHB Program was paused in 2021 due to the COVID-19 pandemic and the increasingly unstable housing market conditions limiting the financial ability of lower- and moderate-income families to purchase a home. Current market conditions support the reinitiation of the FTBH Program. The Federal Reserve implemented three consecutive interest rate cuts in late September, October, and December. These rate reductions, combined with moderating Oceanside home values, have meaningfully improved affordability metrics for lower- and moderate-income households. Given these favorable trends, it is anticipated that market conditions will align for an effective first-time homebuyer program in Oceanside.
The Housing & Neighborhood Services Department seeks to ensure readiness with this program, as market conditions align favorably for lower-income families seeking to achieve homeownership in Oceanside. On January 6, 2025, HUD updated the program with increased lending limit amounts and updated periods of affordability (24 CFR 92.254 <https://www.ecfr.gov/current/title-24/subtitle-A/part-92/subpart-F/section-92.254> at <https://www.ecfr.gov/current/title-24/subtitle-A/part-92/subpart-F/section-92.254>). These updates have been incorporated into the City’s FTHB Program.
The current program provides down payment assistance through a 30-year loan structured to encourage long-term residency and generational wealth building in Oceanside. During the first 15 years of the loan, borrowers are able to defer monthly payments while interest accrues at 3% annually. After 15 years of continuous homeownership, all accrued interest is forgiven, serving as an incentive for families to establish long-term residency in the community.
After this forgiveness, borrowers owe only the original loan amount (principal). This interest forgiveness structure supports generational wealth by preventing interest accumulation that can erode home equity, allowing families to build financial security and potentially pass property to the next generation. The loan must be repaid in full when the home is sold, refinanced, no longer owner-occupied for the required terms of the loan, or at the end of 30 years-whichever comes first.
On May 7, 2025, as part of the U.S. Department of Housing and Urban Development (HUD) CDBG/HOME Annual Action Plan process for Fiscal Year (FY) 2025-26, the City Council approved an allocation of $500,000 from its HOME funds for the First-Time Homebuyer (FTHB) Program. The FY 2025-26 Annual Action Plan was subsequently submitted to HUD and approved for implementation.
The CalHome First-Time Homebuyer Program has a fund balance that may only be used for homebuyer assistance. Staff is requesting an appropriation of $500,000 to the FTHB Program as part of the FY 2025-26 Operating Budget.
The FTHB program is consistent with the goals, strategies and programs as outlined within the City’s adopted and HUD approved FY 2025-26 Annual Action Plan, the Five-Year Consolidated Plan (2025-2029) and the 2021-29 Housing Element.
FISCAL IMPACT
Staff is requesting to appropriate $500,000 to CalHm-1st Tm Hm Buyer account from the CDC CalHome Program Restricted fund balance account 289.3010 which has a current available balance of $1.18 million, therefore, sufficient funds are available.
|
Description |
Request to Appropriate |
Account Number |
|
CalHome |
$500,000 |
931473900289.5540 |
The recommended actions will have no impact on, or use of, General Funds. Current funds are from prior grant allocations from the California Department of Housing and Community Development and HUD.
COMMISSION OR COMMITTEE REPORT
On March 3, 2025, the Housing Commission recommended City Council approve the CDBG/HOME Annual Action Plan for Fiscal Year (FY) 2025-26, inclusive of an allocation of $500,000 from the City’s HOME funds for the FTHB Program. Subsequently, on December 16, 2025, the Housing Commission, by a vote of 7-0, recommended that the City Council appropriate $500,000 in the available fund balance of CalHome revenue for implementation of the FTHB Program.
CITY ATTORNEY’S ANALYSIS
Not Applicable.
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Prepared by: Manuel H Perez, Housing Program Analyst
Reviewed by: Leilani Hines, Housing & Neighborhood Services Director
Submitted by: Jonathan Borrego, City Manager
Attachments:
1. Staff Report
2. Program Summary
3. Family Size & Area Median Income Limits
4. Required Period of Affordability
5. Program Rollout & Implementation Timeline