Purchase Assistance Loan (PAL)

The Housing Trust of Santa Clara County's Purchase Assistance Loan (PAL) is one of five loan products currently available from the Housing Trust, and is a deferred loan.

Who it Helps

Homebuyers earning up to 120% of Santa Clara County median income purchasing foreclosed homes in designated census tracts in San Jose. As shown below, the household income for a single member household cannot exceed $88,200 and the household income for a household of four cannot exceed $126,000.

How it Helps

The Housing Trust's Purchase Assistance Loan (PAL) is funded under the Neighborhood Stabilization Program (NSP2). The PAL is a deferred second loan of 20% of the purchase price up to $50,000 to help with the purchase of foreclosed and abandoned homes and those at risk of foreclosure in San Jose. For a list of the eligible areas, click here.

The PAL is a 30-year loan with an interest rate of 0%. Payment is deferred until the expiration of the term, sale of the home, or refinance of the first mortgage. There are no monthly payments on a PAL loan.

Important Guidelines that differentiate PAL from other Housing Trust homebuyer programs

• You do not have to be a First-Time Homebuyer to qualify, however you must live in the home as your primary residence.
• Purchase price of home must be 1% below appraised fair market value.
• You must complete an 8 hour HUD approved Homebuyer Education class.
• Property is subject to environmental review and home inspection by the City of San Jose.

Read the NSP2 definition of a foreclosed home. Click here.

Read the policy alert for guidance on NSP Tenant Protection Requirements. Click here.

Download a copy of the Purchase Assistance Loan (PAL) program guidelines. Click here.

Download a copy of the PAL Property Eligibility Requirements handout. Click here.

For a sample PAL Program Addendum for Real Estate Contracts click here.

Application Documents
To download the Application form, click here.
To download the Notice to Seller form, click here.
To download the Seller Certification letters, click here.

Homebuyer Calendar: Visit our calendar to see monthly scheduled workshops and HUD approved homebuyer education classes: Click Here.