Qualified teachers in low-performing school districts will have a better shot at owning homes -- even in a Bay Area market that is still sky-high -- through the expansion of a state loan program.

The Extra Credit Teacher Home Purchase Program, launched in 2000, aims to retain experienced teachers, a difficult task in the Bay Area, where the median housing price is $466,000. Since its inception, 16 teachers in Santa Clara County have benefited from the program, with loans totaling $4.2 million.

Credentialed teachers at low-performing schools can already get a low-interest first mortgage covering 97 percent of a home's purchase price through the California Housing Finance Agency, which administers the extra credit program.

But with the passage of Proposition 46 last year, the agency now has $24 million set aside specifically to help teachers raise a down payment -- often the largest obstacle to home ownership.

``This can be the determiner of whether our teachers stay in Franklin-McKinley or go to Bakersfield or some other place where you can buy a home for $130,000,'' said Larry Aceves, superintendent of Franklin-McKinley School District, where most schools qualify as ``low performers'' by state standards, and where the average teacher salary is about $50,000 a year. ``For us, exodus is an issue, because teachers will stay three or four years and decide, `I can't do this anymore.' ''

Proposition 46 funds

At a news conference in Elk Grove on Wednesday, state Treasurer Phil Angelides, state schools chief Jack O'Connell and state Secretary of Education Kerry Mazzoni announced that as of July 1, the housing finance agency has been distributing the Proposition 46 money. Theresa Parker, executive director of the agency, said it hopes the $24 million will fund down payments for at least 500 teachers a year.

``If they are willing to teach for three years at our low-performing schools, we are going to reward their commitment by helping them become homeowners,'' Angelides said.

Proposition 46 directed the state to issue $2.1 billion in bonds to fund construction and renovation of homes for farmworkers, seniors and families fleeing domestic violence. It included $385 million for the California Housing Finance Agency, which set aside $24 million for the second mortgage/down payment program.

Some stipulations

That money allows the agency to award teachers $7,500 or 3 percent of the home's purchase price -- whichever is higher -- to use as a down payment. There are some caveats:

The teacher, administrator or staff member must work at a school that has scored between one and five on the state's Academic Performance Index (API) or work in a district where most schools fall in the bottom half of the index. The highest score on the index is 10.

The borrower must be a first-time home buyer and must live in the house. Interest on the second mortgage is deferred, goes down one percentage point each year and is reduced to zero if the borrower continues to work in the school district for three years.

Rodney Black, a health teacher at Valley High School in Elk Grove, bought his first house -- just a few blocks from school -- through the agency's program.

``I didn't want to choose between buying a home and my teaching career,'' he said.