News

Landed to provide down payment help to Palo Alto teachers

Company aims to keep teachers, staff closer to where they work

Landed, a San Francisco company that helps public school educators buy homes by covering a portion of their down payments, is partnering with the Palo Alto school district.

Landed held an information session for teachers and staff on Wednesday, following a late-August meeting with Superintendent Don Austin and union presidents Teri Baldwin and Meb Steiner to discuss the partnership.

The partnership requires no financial contribution on behalf of the school district; Palo Alto Unified only sends communication to its employees about Landed and interested staff can reach out to the company for more information.

Since 2015, Landed has worked with school districts throughout the state — and now nation — to help teachers and staff purchase homes closer to where they work. For eligible teachers and staff, Landed will pay up to 10 percent of their down payment. For example, if a home costs $800,000 and the 20 percent down payment ($160,000) is out of reach, Landed will split the payment with the teacher. The company also provides a real estate agent, a lender and financial guidance. There are no upfront fees or monthly payments.

Landed makes its return on investment when the teacher sells or buys out the investment. When the homebuyer is ready to end the partnership with Landed (any time before 30 years), he or she pays back Landed's original investment plus 25 percent of the appreciation or depreciation in the home.

The only requirements are that the applicant qualifies for a primary mortgage, has worked for at least two years in a public school district and commits to staying for at least two more years.

"For schools in Palo Alto and for districts like Palo Alto Unified, recruiting and retaining their employees has become the biggest challenge," said Landed Engagement Lead Kat Clark. "The pressure on the public schools in communities like Palo Alto impact the whole community, especially the children."

Landed has partnered with 84 school districts across the country, the majority in the Bay Area, including in Menlo Park, Mountain View, San Mateo and other Peninsula cities. As of this week, the company had helped 100 teachers purchase homes.

Superintendent Austin said that Landed may only impact a small segment of employees, but that the district is trying to address rising housing prices "through multiple options that make sense to the individual."

Clark also acknowledged that Landed is only one piece of the housing puzzle. The company decided to address down payments in particular because for many people in the Bay Area, the payments presented the "biggest hurdle" to homeownership.

"We really see ourselves as part of this larger ecosystem of people in the Bay Area who are trying to address this problem. We know there's not just one solution," Clark said.

Locally, another teacher housing proposal is gaining traction. Spearheaded by County Supervisor Joe Simitian earlier this year, the idea is to build at least 60 housing units on county-owned land at 231 Grant Ave. in Palo Alto exclusively for teachers and school staff. In order to pay for the steep costs of the project -- estimated at $36 million -- Simitian is banking on each of the five regional school districts to pony up $600,000 for their share of the units.

Baldwin, president of the Palo Alto Educators Association, said neither Landed or the county project will help all teachers, but she hopes that together with other initiatives they will help more "teachers to be able to afford to live a workable distance from their schools."

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Comments

11 people like this
Posted by PJ
a resident of Duveneck/St. Francis
on Sep 13, 2018 at 10:32 am

what a racket. They put ten percent, use their real estate agent so they get three percent back, and then get twenty five percent of the upside of the whole property plus their ten percent back. The teacher is on the hook for the big mortgage and they still show themselves as doing a good deed


9 people like this
Posted by Smells Fishy
a resident of Crescent Park
on Sep 13, 2018 at 10:45 am

It may be even worse than PJ thinks. The article says they pay up to 10% of the down payment. If that's accurate, for a 20% down payment, they're lending at most 2% of the price of the home but getting 25% of the appreciation.

Either way, it's a ripoff. I doubt many math teachers will go for this.


6 people like this
Posted by rsmithjr
a resident of Duveneck/St. Francis
on Sep 13, 2018 at 11:56 am

rsmithjr is a registered user.

The fixed 25% of appreciation upon sale makes this a poor investment in this community under the conditions that have prevailed for the last half century. In other areas, the 25% might not cover Landed's cost.

Essentially, this is a second mortgage with that, instead o calculating the payment some fixed or variable interest rate computed on the unpaid balance (which accrues), is a fixed 25% of the appreciation.

A poor way to do business.


Bob


4 people like this
Posted by Barbara
a resident of Downtown North
on Sep 13, 2018 at 1:30 pm

Is this for real, or some kind of joke??


9 people like this
Posted by Don't Sign on the Dotted Line
a resident of Barron Park
on Sep 13, 2018 at 2:19 pm

> Is this for real, or some kind of joke??


Wow. Loan sharks & PAUSD. What a combo!


4 people like this
Posted by Family
a resident of Another Palo Alto neighborhood
on Sep 13, 2018 at 4:06 pm

It's not much of a deal, is it.

I have a real-estate agent friend who told me that back in the day (like '50s and '60s, but maybe even '70s) it was common for families to pool their money and basically become the bank for a family member, with all the benefits on both sides that that entails. So they'd buy the house as a unit and the homeowner would pay them all back through a real estate agreement like they would the bank.

I can no longer remember the particulars of that, but I know there have been many times that I have wished to make it easier (with appropriate legal protections) for family members to "invest" in my home and reap the benefits proportional to that investment later. For example, if I could put an addition on my house, it would allow us to have family to visit, but we can't afford it. If family were able to let us borrow the money, we would be happy to have the property appraised and come up to a mutual agreement on the percentage of the value that investment is now, and give them a return on that investment upon the sale of the home in that proportion.

It's too bad there isn't a vehicle to allow people in less expensive parts of the country to crowdfund their relatives in more expensive parts in whatever level they can and benefit from the appreciation. Investment funds are benefiting from the local market, why not families?

It would be better than this "deal".


Like this comment
Posted by Kat Clark
a resident of another community
on Sep 15, 2018 at 7:03 am

For anyone interested in further information about Landed and how the program makes financial sense for homebuyers, I recommend the articles below. Landed does not make a profit from the down payment assistance programs we manage on behalf of community investors.

Web Link
Web Link
Web Link
Web Link

If you have any questions about Landed, please feel free to reach out to me directly: bayareaschools [@] landed.com.


4 people like this
Posted by Let's Make a Deal
a resident of Embarcadero Oaks/Leland
on Sep 15, 2018 at 9:21 am

[Post removed.]


2 people like this
Posted by A start?
a resident of Palo Alto High School
on Sep 15, 2018 at 3:42 pm

While it's a start, even with the mortgage help, teachers are fairly screwed when it comes to buying real estate locally. Many can't qualify for the monthly payment if homes are in the immediate Bay Area, let alone Palo Alto...even condos and townhomes are out of reach unless they're studios due to HOAs. The next issue is competition for the lowest-priced homes within the budget of a teacher--sellers (understandably) want to sell to the highest offer, not to a teacher who can't afford more than a 4k monthly payment. Teachers aren't competitive buyers in bidding wars when homes regularly go for 100k over asking. Again, it's a start, and a helpful FIRST step, but a comprehensive approach is needed.


Like this comment
Posted by mmmmMom
a resident of Midtown
on Sep 19, 2018 at 1:03 am

Nothing against teachers here, but giving extra financial support to only to teachers is ridiculous. How about Nurses??? You know, those folks who work weekends, holidays, & all through the night. No summers off. Yeah, those people. Nurses salaries aren't larger than teachers. And Nurses rarely receive pensions, either.
It is past time for residents to include Nurses when discussing teachers, fire fighters, EMTs, & other professions priced out of the local cost of living.


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