ELK GROVE, CA (MPG) - The City Council here voted 4-0 Sept. 23 in favor of a resolution addressing a lack of affordable housing for an often-overlooked group when it comes to home buying financial assistance: moderate-income households.

Councilmember Darren Suen was absent but expressed support for the program.  

The resolution addresses homebuying assistance for this group – often called the “missing middle” – through the newly-created Moderate-Income Homebuyer Assistance Program. The program is designed to provide down-payment and other forms of assistance to potential homebuyers in moderate-income brackets. Most affordable housing assistance programs are targeted at low-income households making 80% of the area median income (AMI), which in Sacramento County is $105,100 for a family of four.

Households making 81%-120% of AMI are usually found to be making too much money to qualify for home-buying assistance but not enough to afford market-rated housing, which can lead to fewer home sales.

“Ninety percent of housing stock is single-family homes, meaning the barriers to entry is really tough and tied to single family home prices,” Elk Grove management analyst Joshua Tovar told the council.

The council set aside $2 million of Measure E funds in its 2026-2027 budget to address the lack of homebuying assistance for moderate-income families through initiatives such as the new program. The Moderate-Income Homebuyer Assistance Program “is intended to effectuate this investment and advance council’s established housing priorities,” according to the staff report.

Qualified moderate-income households – who can have annual incomes of $104,150 for a single person to $196,400 for a family of eight – must meet specific criteria for homebuying assistance. Eligible properties must be in Elk Grove, pass required inspections, be safe and habitable and be the buyer’s primary home.

Rental properties, shared rentals and short-term rentals are ineligible. All loans will be secured by a loan agreement, promissory note and deed of trust.

Besides Measure E funding, the program will draw from the state’s Permanent Local Housing Allocation (PLHA) program. Elk Grove has $400,000 in PLHA funds, Tovar said. 

The city has been assisting low-income households with housing purchases since 2009. The differences between the two programs are the income range, tying the maximum home purchase price to the city’s median sales price – now $625,000 – and requiring purchasers to meet and follow PLHA requirements.

PLHA funding would be available now for assistance for up to six moderate-income homebuyers, with Measure E funds available to supplement requests as needed.

“Staff not only looks at household income, but we also factor in their assets, any earnings from investments, to ensure that these households have an identifiable need and we adjust the level of city assistance accordingly,” Tovar said.

A moderate-income homebuyer, for example, whose purchase requires a minimum 3% down payment of $18,750, could receive $12,500 from the new program. A homebuyer with a 5% down payment of $31,250 could receive $25,000. And a homebuyer with a 10% down payment of $62,500 could receive $56,250. One with a 20% down payment of $125,000 could receive $60,000.

The city’s program could also be paired with other forms of homebuyer assistance.

The program not only addresses the “missing middle” for housing assistance, Mayor Bobbie Singh-Allen said, but also creates wealth in the community through equity, along with stability. 

“It meets a tremendous need in our community,” Singh-Allen said.