Below Market Rate Downpayment Assistance Loan Program (BMR DALP)


Financial assistance made available under the Below Market Rate Downpayment Assistance Loan (BMR DALP) Program may only be used to cover the need-based downpayment assistance for low and moderate income households who otherwise would not be able to purchase a BMR. The City and County of San Francisco (the “City”), Mayor’s Office of Housing and Community Development (MOHCD) will only extend loan funds when is necessary for a borrower to qualify for an affordable mortgage, in conjunction with a BMR purchase.

In accordance with the Program guidelines and its purpose, the participating lenders shall assume the following roles and responsibilities:

  • Lender determines the Borrower’s financial ability to purchase the desired property.

  • Lender is to make every effort to qualify the Borrower for the maximum financing on the first mortgage.

  • Lender submits the evidence of financing the maximum 1st mortgage loan amount when submitting an application for a BMR DALP loan.

To qualify for a BMR DALP loan, an applicant must:

  • Have a purchase approval letter for a BMR unit issued by MOHCD
  • Be a first time homebuyer under the rules and policies of the MOHCD BMR program
  • Meet all program requirements and approvals for a BMR DALP loan
  • Complete Verification of Homebuyer Education requirements through a MOHCD-approved housing counselling agency
  • Have a mortgage loan approval or commitment letter from a participating first mortgage lender with a 30-year fixed rate loan
  • Demonstrate need for down payment assistance to purchase the BMR unit (determined by MOHCD)
  • Be within the required income limits - up to 120% AMI published by MOHCD 
  • Provide at least a 5% of the sales price toward the down payment of the BMR unit. Of the total 5%, 3% must be the borrower's own funds and the remaining 2% can be gifts or grants
  • Have a minimum of 33% front-end (housing) ratio and maximum of 43% back-end (total debts) ratio 
  • Have no more than $200,000 in liquid assets prior to purchase, and no more than $15,000 in liquid assets after purchase
  • Have a minimum of 3 months reserves (principal, interest, property taxes, hazard insurance and homeowner’s association dues) in reserves after purchase. In addition to Liquid Assets, vested funds from retirement accounts that permit withdrawals may be also used for reserves.

IMPORTANT: All adult household members who will be on the loan and Title must have a first-time homebuyer workshop certificate ready at the time of application. The homebuyer workshop certificate must be issued within 12 months from the date of the application. If your certificate is older than 12 months, please contact the counseling agency which issued your certificate. 

MOHCD BMR DALP Program will:

  • Extend the maximum loan amount for the lessor of: 1) Amount of need based on maximum 1st mortgage financing; or 2) Maximum BMR DALP loan amount, up to 15% of the sales price. Under no circumstances will the City provide funds to a homebuyer in excess of what is needed to close the loan.
  • Require no monthly payments and accrue no interest
  • Be due at the end of 30 years, with a share of the appreciation on the unit proportional to original percentage of the loan
  • Be paid in full including any share of appreciation at the time of repayment
  • Be pre-payable with any applicable share of appreciation at any time with no pre-payment penalty
  • Be required to be repaid when BMR borrowers prepay their first mortgage loans while their BMR DALP loans are still outstanding

Additional Requirements:

  • First mortgage loan-to-value (LTV) must not be less than 50%
  • The maximum combined loan-to-value (CLTV) cannot be more than 95%​
  • The BMR DALP loan must be in a junior lien position behind the first mortgage and BMR lien. 
  • Household must set up an Impound Account on the 1st mortgage loan
  • Household must have H06 Insurance

Eligible Uses of BMR DALP Funds:

  • BMR DALP funds can be used to contribute to the need-based down payment for the borrower's household who otherwise would not be able to purchase a BMR
  • BMR DALP Funds can be used to enable the borrower to meet the maximum debt-to-income ratio established making the mortgage payment affordable to the borrower
  • BMR DALP funds cannot be used as a cushion factor to make the loan more appealing to the borrower and/or the lender
  • BMR DALP funds cannot be used to pay for upgrades, improvements and repair costs
  • BMR DALP funds cannot be used for financing of storage units, additional spaces, and/or second parking spaces
  • BMR DALP funds cannot be used to pay down the first mortgage principal, debt or liens
  • Cash disbursed to the borrower cannot exceed $250 at close of escrow. Any excess cash must first be applied towards the reduction of BMR DALP loan amount 

Other than specified herein, all other BMR and DALP program requirements shall apply.

BMR DALP Manual and Forms



PDF iconCombined DALP Application 1-2018

PDF iconBMR DALP Announcement 2016-11

A BMR DALP applicant must work with a MOHCD participating lender.

How to Become a BMR and BMR DALP Lender:

All Mortgage Loan Officers and brokers who will originate BMR DALP loans must complete all required DALP, MCC and BMR lender training provided by MOHCD and must have a NMLS ID. The MLO must be familiar with MOHCD lending guidelines, forms, timeline and must ensure that their lending institution can lend to a BMR home buyer. Please click here for Lender Workshops/Training.

For more information, please call 415-701-5500 or email