Zero Interest Supplemental Home Loan Program

Zero Interest Supplemental Home Loan Program

UC Davis has been working together with the University of California Office of the President, or UCOP, to evaluate new approaches to make housing more affordable. These efforts led to the development of a Zero Interest Program Loan, or ZIP loan. These loans are primarily intended to be a recruitment tool to help our campus build a diverse new generation of faculty and is expected to help recruit assistant professors as well as difficult to fill academic positions.


  • For recruits receiving offer letters on January 1, 2023 or thereafter
  • Is subject to meet the underwriting guidelines for the program loan
  • Must be a full time University appointee holding an eligible title in the following categories:
    • Academic Senate
    • Acting Assistant Professors
    • Academic titles equivalent to titles held by Senate members as defined in University Policy
    • Senior Management Group or above
  • Only one ZIP loan and one ZIP participant is allowed per purchase transaction
    • The campus will specify the one ZIP participant at the time of nomination
    • The ZIP participant will be designated as the Primary Borrower for the Program Loan and will assume all tax reporting and forgiveness parameters tied to the Program Loan

Note: Program participation is subject to the availability of funding by the nominating school/college/unit.

ZIP Overview

  • Interest Rate: Zero percent interest
  • Monthly Payment: No monthly payment
  • The loan term: approximately 11 years depending on the funding date
  • Minimum Loan Amount: $10,000
  • Maximum Loan amount: $150,000
  • Forgivable feature: 10% of original principal will be forgiven annually; subject to the participant meeting the forgiveness criteria
    • Any loan forgiveness will be reported as taxable income in the year forgiven on a W-2 form and is subject to standard withholding requirements
  • Lien Position: 2nd or 3rd
    • Can be used in conjunction with MOP or subordinate to an outside loan, subject to the Program (+standard fees) and primary lender’s guidelines
  • Transaction Type: Purchase of a Primary Residence (single family home or condo)
  • Due Date: end of loan term or on the loan acceleration date
  • Repayment: Upon the due date, original principal balance (less any forgiven amounts) is fully due and payable and is considered a “balloon payment”
  • Loan Acceleration: ZIP is a condition of employment loan. The ZIP loan can be due and payable before the due date (loan acceleration date) if borrower separates for any reason (including upon death, retirement or disability), becomes ineligible, or when the property securing the loan is sold or transferred

Note: ZIP loans may not be combined with campus SHLP loans or Faculty Recruitment Allowances