The Contra Costa Times quotes Professor Joe Bankman on how some government employees have been able to access low-interest home loans. 

Amid a Bay Area real estate market famous for its mind-boggling home prices, taxpayers are funding a little-known special perk for a very select group of house hunters: low- and sometimes no-interest loans for top local government employees.

While most of us are stuck turning to Bank of America or Wells Fargo for market-rate mortgages, an exclusive group of the region’s public-pay elite — made up of mostly city managers, a few school superintendents and even the head of a sewer district — are tapping public funds for sweetheart housing-assistance deals that in some cases exceed $1 million.

…

No-interest loans, however, are rare. A member of the public given a subsidized mortgage would have to pay taxes on anything less than what is known as the Applicable Federal Rate for long-term loans. The rate for this month is 2.65 percent, according to the IRS. But municipal government employees are exempt from such taxes when their employer gives them housing loans under a 1986 IRS regulation, said Stanford law professor Joe Bankman.