Clearlake council directs staff to draft employee home‑loan program using housing set‑aside funds

Clearlake — The City Council on Nov. 2 directed staff to prepare a formal employee home‑loan assistance program after reviewing a proposal that would use restricted housing funds to help city employees buy homes within city limits.

City manager Mr. Flora and staff outlined a model similar to Walnut Creek’s program: the city would record a second lien, require buyers to cover closing costs and a minimum down payment, charge no monthly payments or interest on the city loan, and require repayment when the home is sold or refinanced. As staff summarized, “There wouldn’t be interest charged on our loan and no monthly payments would be required.”

Council concerns and parameters: Council members pressed staff on owner‑occupancy requirements, program sustainability and whether some appreciation should flow back to the city to replenish the loan fund. Council member Overton said she favored a strict owner‑occupancy requirement: “I believe it should be owner occupied, period.” Other councilors suggested partial forgiveness or reduced recovery after long service (for example, reducing the city’s share after 10 years) as incentives to retain employees while sustaining the fund.

Funding and constraints: Staff said the likely funding source is housing set‑aside funds leftover from redevelopment agency proceeds and estimated about $2,000,000 might be available; staff emphasized those funds are legally restricted to housing uses and cannot be diverted to litigation or unrelated expenses.

Council action and next steps: Councilors signaled consensus to move forward and asked staff to return with detailed program language, title and appraisal procedures, sample loan documents and options for repayment or partial forgiveness. Staff said an initial loan might be ready for participation as early as early next year if documents are completed.

Provenance:
Topic intro excerpt: "All right, moving on to item H9, discussion and consideration of adoption of employee home loan assistance program." (SEG 1004)

Topic finish excerpt: "Very good. And I ask when you think this program will start?" (SEG 1803)