Annual income of $50,000 is just under the national median. But in California's Silicon Valley, a family of four earning that much qualifies for housing assistance.

The median family income in the Silicon Valley/Santa Clara County area is $82,600, according to the U.S. Department of Housing and Urban Development. With a median home price above $300,000, only 20% of Santa Clara residents can afford to buy a home.

Now a community development group, using grants from the City of San Jose and local businesses, is raising money to offer assistance to first- time homebuyers who earn up to 120% of the median income - or $99,120.

The Santa Clara County Housing Trust Fund is hoping to raise $20 million, said Charles Chew, who manages the county's housing and community development program.

The two-year campaign, which gets its official start in July, already has an initial investment of $1 million and a challenge grant in the same amount from the county, $1 million from the City of San Jose, and $1 million additionally from five Silicon Valley businesses: Adobe Systems, Applied Materials Inc., Cisco Systems, Kaufman and Broad, and Solectron Corp.

The money will be distributed by a nonprofit group, Community Foundation Silicon Valley, and will not be touched until the entire$20 million is raised, said the co-chairwoman of the trust fund Susan Luenberger.

At that time, the group will accept applications for loans and grants for up to 5,000 families.

Mr. Chew said that at least one-third of the money will go to families that earn less than 50% of the median income. The funds will also be used to provide affordable rental housing, homeless shelters, and transitional housing.

For families who earn $50,000 to $99,120, loans at interest rates as low as 3% will be available to help cover down payment or closing costs.

"Twenty million dollars would probably only buy one apartment complex in this area, so we are going to spread it around to fill financing gaps that couldn't be obtained by traditional means like tax credits or bank (or) bond financing," Mr. Chew said.

The fund is a collaborative effort of the Silicon Valley Manufacturing Group, the Santa Clara County Collaborative on Housing and Homelessness, the county board of supervisors, Community Foundation Silicon Valley, and more than 70 other public and private organizations.

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