Ventura to Consider Home Loans : City Council: The $1-million program would help low- and moderate-income buyers pay for down payments.

The Ventura City Council on Monday will consider getting into the home loan business.

Councilwoman Rosa Lee Measures is proposing that the council spend about $1.08 million for loans to low- and moderate-income prospective home buyers to help them with down payments.

Measures said the program would provide down-payment help to about 40 families. If council members agree to allocate the money, they would approve details of the loan program at a later date.

Measures stressed that the loan program is “not by any stretch of the imagination” geared toward very low-income families. Residents who qualify for the program would have to be good credit risks, she said.

“I’m not willing to put the city at risk,” said Measures, who worked as a banker for about 20 years. “These are average professional people who can make the monthly payments, but who don’t have that nest egg for a down payment.”

Measures heads the city’s housing committee, which has endorsed the plan. But other council members on Friday said they have serious doubts.

“It’s real poor judgment,” Councilman Gary Tuttle said. “That’s being a little too selective with city funds. I think we have an obligation to spread that money around the community a little more than to 40 homeowners.”

The loans would be a onetime program funded by money left over after the city recently paid off some housing bonds. A bank or mortgage institution would administer the loans for the city.

Tuttle said the $1.08 million proposed for the loan program could be spent to help revitalize the city’s downtown.

“It could be used to help upgrade California or Main streets,” Tuttle said. “There are better things to do with that money.”

Community Development Director Everett Millais said the money must go toward some kind of housing program, but details are up to the council.

Mayor Tom Buford said he has not made up his mind on Measures’ proposal, but he said the city staff report that outlines the program was not specific enough. He said few alternatives were presented for council members to consider.

“My main reservation has to do with the fact that I don’t clearly understand what they’re going to do with the money,” Buford said.

He pointed out that several affordable housing projects have recently been completed on the city’s east end and said there may be no need for such a program now.

Measures, who has already begun interviewing banks and mortgage institutions to administer the program, said many traditional affordable housing programs restrict homeowners to buying in particular developments.

Her program would target low- and moderate-income families, but would not restrict them to buying in certain areas or with certain developers. It is also not limited to first-time home buyers, Measures said.

“It’s very flexible,” Measures said. “We should be committed to addressing a diversity of housing programs.”

Under Measures’ plan, residents would be able to receive up to $30,000 in loans and must be able to put down a minimum of 5% on the value of the home from their own funds.

Measures is proposing that no payments be required for the first five years, but simple interest would accrue at 3% per year. From years six to 20, the loan would be repaid at 5% interest.

If approved by the council, Measures hopes to have the program ready to take applications beginning May 1.