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It used to be that an ambitious shelter-seeker could go into the dodgier neighborhoods, plunk down his savings for a fixer-upper, put in some sweat equity and cash out in a few years.

Ray Villareal, president of the San Jose Real Estate Board, laughs when he is reminded of the idea. It just isn't going on much nowadays in Silicon Valley, he says.

These days, even rundown houses get multiple bids.

"The market is so hot right now that the fixer-uppers are not a big difference in price," says David Daviar, a real estate agent at Santa Clara Valley Realty.

As a general rule, the further south, the cheaper the housing. Not too long ago the Santa Teresa and Blossom Valley neighborhoods were a steal. Now, they are still cheaper than Cupertino or Los Altos, but the gap is narrowing.

It's pretty simple, says agent Strangis. "There are a lot more buyers than sellers."

But that doesn't mean there aren't a few diamonds in the rough sprinkled around Silicon Valley. One way to find them, Villareal says, is to look at the properties going up for auction. They might be abandoned buildings, foreclosures or property purchased with drug money.

But as in any real estate transaction in Silicon Valley, better come prepared with a preapproved loan to close the deal on the spot.

California Department of Real Estate--415/904-5925. This licensing agency also handles complaints about real estate brokers, sales agents and mortgage brokers.

Federal National Mortgage Association (Fannie Mae)--1/800-7-FANNIE. Provides information about residential mortgages and affordable housing, and local lenders.

Department of Housing and Community Development--Provides loans for low-income housing projects to individuals and nonprofit and government agencies. To find out how to qualify for these loans for projects in this area, contact:
Santa Clara County Housing and Community Development--408/441-0261.
San Jose Department of Housing and Community Development--408/277-4747.

California Housing Finance Agency Loans--Administers several loan programs for low-income individuals. Rates typically a point or so below market rates for eligible first-time buyers. The minimum down payment is as low as 3 percent; the sales price of units is limited to $228,411. Call 800/789-CHFA.

Cal-Vet Loan--For first-time buyers. Cal-Vet loans generally are offered at lower-than-average interest for veterans. For information, call 800/952-5626.

Mortgage Credit Certificates--This program for first-time homebuyers allows a buyer to take a tax credit equal to 10 percent of the total monthly mortgage interest payment. Call the San Jose Real Estate Board at 408/998-7300, or Santa Clara County at 408/299-4711.

VA Loans--Santa Clara County Veterans' Office, 1650A Las Plumas Ave., SJ (800/827-1000 or 408/299-2605). To qualify for the VA loan, veterans apply to the VA, which then issues a certificate of eligibility.

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From the March 5-11, 1998 issue of Metro.

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