Second Loan Program

To assist employees with the initial down payment to purchase a home in the Bay Area, the District offers a second loan program. 


  • Fifteen year loan for second loans that are paired with FHA First Loans and ten years for conventional loans; restricted to owner-occupied homes.

  • Loans are available for all regular employees and to adjuncts who teach 40% of a full time load and have been continuously employed for three years or six semesters.

  • Employees who currently are under federal or state mandated wage garnishment or who are involved in progressive disciplinary procedures are not be eligible to participate in the program.

  • The program prohibits the use of loans that have negative amortization, pre-payment penalties, and shorter term interest-only options. Variable rate loans are normally not allowed without the express written consent from the District.

  • Each loan will charge interest and/or shared appreciation, depending on the restrictions of the first loan.

  • The ten year loan will be interest and payment free for five years; interest in years six through ten will be calculated at the 11th District Rate of Funds (currently .668) plus 3%, payable monthly. Interest will be calculated based on a 25 year payback, which means there will be a balloon payment owed at the end of the ten year period. When the employee sells or refinances the home, leaves District employment or at the end of the ten year term of the loan, the employee is required to pay a “shared appreciation payment” that is calculated as:
    • Establish the sale or appraised value of the home.
    • Subtract from that amount the original sales price and the cost of improvements paid by the employee.
    • Multiply that by the District’s share which is calculated as: District loan amount divided by purchase price.

  • Second loans that are paired with FHA first loans must be fifteen years in length and they cannot charge both interest and shared appreciation. Therefore, for years one through five, the loan will be an interest only loan, based on the 11th District Rate of Funds plus 3%. Interest in years six through fifteen will be calculated based on a 25 year payback; there will be a balloon payment at the end of the 15 years.

  • The loan can be called or converted to the current market rate (at the District’s discretion) if the employee leaves College District employment.

  • Employees must meet the following program underwriting matrix for loans:

FICO Score range

Employee Share of

Down Payment Required

CLTV   including SMCCD Loan

640 – 659



660 – 679



680 – 719



720 – 850




  • For loans greater than $50,000, the employee must provide a dollar for dollar match for amounts over $50,000 and put at least 20% down.

For the guidelines, click here  

For the application form, click here   

Any questions, please send an email to