BMR Downpayment Assistance Loan Program (BMR DALP) Overview

 

 BMR DALP DOWNPAYMENT ASSISTANCE LOAN PROGRAM OVERVIEW (Rev 11/16)

 

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 Needs Assessment Worksheet and evidence of financing the maximum 1st mortgage loan amount when submitting an application for a BMR DALP loan.

 

To qualify for a BMR Down payment Assistance Loan (BMR DALP), an applicant must:

  • Have a purchase approval letter for a BMR unit issued by the Mayor's Office of Housing and Community Development (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 homeownership counseling at a MOHCD approved agency
  • Have a mortgage loan approval and commitment letter from a participating first mortgage lender with a fixed rate loan and 30 year term
  • Demonstrate need for down payment assistance to purchase the BMR unit (determined by MOHCD)
  • Be within the required income limits published by MOHCD and HCD
  • Have higher than 33% housing front-end debt-ratio before using the BMR DALP and maximum of 43% back-end debt ratio (housing, plus all other unsecured debt)
  • Mortgage Credit Certificate (MCC) eligibility based on BMR Approval Letter from MOH (Obtain from borrower or seller' agent)

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 6 months from the date of the application. If your certificate is older than 6 months, please contact the counseling agency which issued your certificate.  Please also submit updated verification of income if i.e. three current and consecutive pay stubs with year-to-date (YTD) and VOE; Federal Income Tax Return (included all schedules, signed and dated) and W-2 forms to complete set of three (if applicable); All pages of last 3 months bank statements for checking, savings & other pertinent investment accounts.

San Francisco Mayor’s Office of Housing and Community Development BMR DALP Program will:

  • Extend the maximum loan amount for the lessor of: 1) Amount of need established by the Needs Assessment Worksheet (based on maximum 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
  • Assistance is available to buyer households who make no more than the maximum income pertaining to the BMR unit being purchased.  Please refer to listing for income details.

Additional Requirements:

  • The buyer must provide at least a 5% down payment towards the purchase price; minimum of 3% must be from the buyer's own funds and the remaining 2% can be gifts.  The borrowers 5% contribution should be applied as downpayment towards the purchase and not closing costs.
  • As a general guideline, our office will issue a BMR DALP loan only if the buyer's housing expenses or front-end debt-ratio is higher than 33% of income before the loan is incorporated
  • With the assistance of the BMR DALP, BMR buyers must carry a first mortgage loan that equals at least 33% housing front-end debt-ratio and no more than 43% back-end debt-ratio (housing and all other unsecured debt) 
  • The BMR DALP may be used to lower a buyer’s housing costs only, and may not be used to offset other consumer debt. The BMR DALP may be used to lower the buyer's housing costs to 33% of income and no lower
  • First mortgage loan-to-value (LTV) must not be less than 50%
  • Household must have at least 3 to 6 months reserves, if approved, after close
  • Buyers must retain no more than $15,000 in liquid cash assets after using the BMR DALP. The actual loan amount granted to a buyer household is subject to MOHCD's review and discretion
  • The BMR DALP must be used in conjunction with a first mortgage loan, household must provide Loan Estimate form from the first mortgage lender
  • The buyer’s first mortgage loan will take first place in lien priority order; the City BMR lien will take second place (this is the difference between the fair market value and the restricted BMR value); the BMR DALP will take 3rd place; and all other loans must follow
  • Household must have an Impound Account
  • Household must have H06 Insurance

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

How to Obtain a BMR DALP:
A BMR Down payment Assistance Loan (BMR DALP) applicant must work with a MOHCD participating lender.

Please use DALP link to access

PDF iconCombined DALP Application 2-2017

PDF iconBMR DALP Announcement 2016-11

 

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 sfhousinginfo@sfgov.org