Home prices in Merced have dropped so fast and so far recently that the city leads the nation in declining home values.
That means real estate is more affordable now for some Merced families, but most houses on the market are still too expensive for average Merced families.
But for a couple dozen homebuyers, that's about to change.
The city has won $660,000 in state money to fund home loans for moderate-income and low-income first-time homebuyers.
The program carries a few caveats: buyers must live or work in Merced, and they must use the money for houses at the Silverleaf subdivision in Bellevue Ranch, a new community under construction in North Merced.
Prices at Silverleaf range from $185,390 for an 800-square-foot two-bedroom to $289,990 for a 1,734- square-foot four-bedroom. The city's new loan program will provide loans up to $30,000 for 22 of those homes.
Silverleaf sales manager Tracy Ogle said the program has attracted interest from nurses, teachers, correctional officers and young families just starting out.
To qualify for one of the state-funded loans, a family of four can't make more than $61,800 a year.
"This is what people need right now," said Ogle. "Everyone is a little scared of the market, but this is going to help a lot of people; it's going to help families that don't have that down payment."
Besides income limits, the loan program also requires buyers to live in the home for one year -- that means no renters and no out-of-town speculators. "That's the beauty of it -- it's for your Merced person that lives and works here, not your investor," said Teresa Langford of Envision Homes, the developer behind Silverleaf.
When it's finished, the Silverleaf neighborhood will feature 82 homes, all set aside for low- and moderate-income buyers. The lower-priced homes have been planned for Bellevue Ranch since 1995, when plans for the 1,380-acre community first were drafted.
Back then, Merced's median home price was $104,000, and 57 percent of houses on the market were affordable to a family earning the median income of $32,700, according to the National Association of Homebuilders. (A house is deemed affordable if a family spends no more than 28 percent of its income on housing costs.)
The agreement Bellevue Ranch signed with the city then called for developers to either build a certain number of lower-priced houses at Bellevue Ranch or give the city money to rehabilitate lower-income housing elsewhere in Merced.
Fast-forward 12 years and a housing boom later, and Silverleaf is the result of that long-ago agreement.
It's meeting a demand for affordable housing that's skyrocketed since Bellevue Ranch was first planned.
Nowadays, Merced's median home price is $278,000, and 7.4 percent of homes are affordable for families earning the median income of $46,800, according to the NAHB.
But now 22 new buyers will find affordable homes.
Reporter Leslie Albrecht can be reached at 209 385-2484 or lalbrecht@mercedsun-star.com.
Who qualifies?Who Qualifies for the State Loans at Silverleaf?
Your household income can't exceed $61,800 for a family of four.
You must live or work in Merced.
You must not have owned a home for at least the past three years.
You must be able to qualify for a first mortgage loan.
You must occupy the house as your primary residence.
For more information on the home loans available at the Silverleaf development, call the Envision Homes sales office at 209-383-0800 or check out www.EHforless.com