Changes to Housing Allowance Programs
Stanford’s financial assistance programs increase the purchasing power for eligible faculty and lower monthly housing expenses. The Housing Allowance Program (HAP) supplements income upon the purchase of a home. The supplement is paid over a number of years and can be used alone or in combination with other purchase programs. These changes affect HAP, CEHAS, CEHASG, and HAP II.
Increase HAP: To help offset the high cost of home ownership, for new purchases, HAP is increased from $150,000 to $200,000 and will be paid over a twelve year period instead of nine.
Additional Year of HAP: To benefit existing homeowners, you will receive one additional year of your housing allowance benefit (HAP, CEHAS, CEHASG, and HAP II). This freezes the amount of your current payment and duplicates it for one additional year. Beginning February 1, 2022, your housing allowance will not be reduced on your anniversary date. Your current payment will remain in effect until your anniversary date in 2023.
Restricted Ground Lease Program Changes
The intent behind the Restricted Ground Lease (RGL) is to enable eligible faculty to purchase a home for the same or lower cost as renting, with the potentially significant added benefit of building equity over time through value appreciation. The RGL provides new or remodeled housing, designed to meet the specific needs of the faculty, in neighborhoods very close to campus, at a significant discount from the market. The homes are 3–4 bedrooms, many with an office space and a yard. Additionally, there are 2–3 bedroom condominiums at University Terrace. Eligible faculty can purchase these homes through Faculty Staff Housing using Stanford’s financing programs.
Increase appreciation: The appreciation cap for all existing homes on the RGL and all future sales will be increased to a fixed rate of 4.5%, rather than a rate that is set annually. Increasing the cap provides faculty with the possibility of a greater return when they sell.
Reduce the down payment for condos: The down payment to purchase a RGL condo can be lowered from 10% to 5%. We heard from faculty that amassing enough money for a down payment can be a challenge. With this reduction, an eligible faculty member will need less money upfront to purchase a condo.
Allow exception loans: Currently, exception loans are not currently allowed on an RGL purchase. The terms for exception loans can be more favorable than an outside loan and can lower the monthly housing expense. If a school wants to fund and provide an exception loan, the loan can now be used for a RGL purchase.
Remove first-time homebuyer purchase restriction: Originally, only first-time homebuyers could purchase an RGL home. This change gives homeowners the choice to move from one RGL home to another.
Other Future Changes
Expand the qualifying area: Stanford loans can be used in a defined Qualifying Area. Increasing the Qualifying Area to the East Bay, including Oakland, and to the South Bay, including San Jose, helps give faculty more choices on where to live. This change will be effective in FY23.
Specific help for University Terrace homeowners: The University Terrace Homeowner’s Association (HOA) identified several issues around condo building construction and planning, reserve funding, HOA fee budgeting, and security. Stanford will work with the HOA to provide one-time funding of these requests and consider paying for expenses that will lower monthly HOA dues. Stanford will also pay for an on-site property manager.