Purchase Assistance Loan (PAL) for first-time home buyers

The City of Menlo Park's Purchase Assistance Loan (PAL) is an affordable second mortgage loan program designed to help low to moderate-income first-time homebuyers purchase homes in Menlo Park.  PAL can also eliminate or substantially reduce the first mortgage lender's requirement for Private Mortgage Insurance (PMI).

PAL Terms:

• Maximum loan amount is $75,000 or up to 20% of a home's purchase price, whichever amount is less.
• Loan term is 35 years. The first 5 years of the loan is at 0% interest with no payments required. The following 30 years are fully amortized (monthly payments required) at 5% fixed interest.

PAL Benefits:

• Makes it easier to qualify for home purchase by allowing low to moderate-income homebuyers to apply for smaller first mortgages.
• May help you avoid the first mortgage lender’s requirement to purchase PMI (Private Mortgage Insurance).
• Applications are easily processed along with the first mortgage application.
• No PAL application or loan processing fee.
• Applicants may work with the first-mortgage lender of their choice (within certain parameters). 
• Can be used to help purchase market rate homes as well as City of Menlo Park Below Market Rate (BMR) homes.
• Can be used to purchase single-family detached, townhomes, or condominium units.

PAL Requirements:

• Applicant (or a member of the applicant’s household) must currently live or work in Menlo Park.
• Applicant (or a member of the applicant's household) must have lived or worked in Menlo Park for at least one year at the time of application.
• Applicant must be a first-time homebuyer (has not owned a home as their primary residence within the last three years).
• The home being purchased must be located within incorporated City of Menlo Park.
• Applicant's gross annual household income may not exceed 110% of Area Median Income (please see chart).
• Applicant must be creditworthy and able to qualify for a first mortgage loan (no sub-prime, negative-amortizing, or balloon payment loans allowed).  Applicant must be able to provide a down payment in the amount specified by their first mortgage lender.

For a complete detailed description of the PAL Program, please see the PAL Guidelines

To request a copy of the complete PAL Guidelines & Application, please call: (650) 330-6728.

Mortgage Credit Certificate Program (MCC)
San Mateo County's Mortgage Credit Certificate Program (MCC), a federal tax credit program, may be used in conjunction with PAL.  The MCC Program helps to increase the first mortgage loan amount for which homebuyers may qualify.  Funding for MCC's is not always available, however, and MCC's will be made available to qualified PAL applicants as long as there is sufficient funding available to do so.   
PAL applicants may apply for the MCC Program at the same time that they apply for PAL.  Unlike the PAL Program, however, the Mortgage Credit Certificate Program requires that applicants work with participating MCC mortgage lenders (also there are differences in qualifying criteria between the PAL and MCC Programs).  For more information or to find out about funding availability, call the County of San Mateo Department of Housing at (650) 802-5033.