Limited Equity Program
LIMITED EQUITY HOME OWNERSHIP PROGRAM
All affordable homes formerly sponsored by the San Francisco Redevelopment Agency, whether new or resale, are part of the Limited Equity Home Ownership Program (the "Program"), described below.
To be eligible for this program, homebuyers must meet all of the following:
- First-time Homebuyer: Homebuyer cannot have owned any residence in the past three years.
- Income Eligibility: Current total household income (including an asset calculation) cannot be more than the designated percentage of Area Median Income ("AMI") for the home. Income includes all sources of income for each household member aged 18 and over. See the "General Income Limits" section below for further information.
- Down Payment: Homebuyer must make a minimum 5% down payment, which will vary based on the sales price of the home. Of the total 5%, 3% needs to be the homebuyer's own funds (held in a financial institution) and 2% can be gift funds (not yet received). Total down payment cannot exceed 50% of the sales price.
- Program Restrictions: Homebuyer must read and sign all MOHCD documents, and agree to the occupancy and resale restrictions of the Program.
- Household Size: The Program offers a range of studios to four-bedroom homes. We require a minimum of one person per bedroom. In addition, all unrelated members of the household must live together at the time of application.
- Mortgage: Homebuyer must be able to qualify for and obtain a first mortgage from a MOHCD Approved Lending Institution, underwritten to MOHCD standards: 30-year, fixed rate loan, front end debt ratio no lower than 28% and no higher than 38% of gross income, and the inclusion of all adults aged 18 and over on title and loan unless claimed as a dependent on last year's tax returns.
- Preference: First preference for all affordable home sales is given to Certificate of Preference holders. San Francisco residents and workers may also receive preference. Other preferences may apply per project and will be noted in the listing.
General Income Limits
MOHCD sets maximum incomes for all Limited Equity Program affordable units. These limits can vary from unit to unit and from location to location. Click here for a PDF listing the current year Area Median Income (AMI) levels for the San Francisco Metropolitan Area. The income levels are adjusted for household size. Be sure to check the income limits for the specific property in which you are interested. Either the sales agent, your housing counselor or lender can help if you have questions about how to determine your eligibility.
Please note that income limits are adjusted each year based on data provided by the United States Department of Housing and Urban Development (HUD).
About the Limited Equity Home Ownership Program
Generally, affordable homes are priced for and restricted to households earning between 55% and 120% of AMI, with emphasis on households earning less than 100% of Area Median Income.
- The Program is designed to provide home ownership opportunities to qualified low- and moderate-income households who otherwise would be unable to purchase a home in San Francisco.
- The Program's main goals are to create permanently affordable homes and to offer participants an alternative to renting that enables them to build equity, and enjoy tax deductions and other benefits of home ownership.
- Buyers who meet MOHCD eligibility criteria can purchase homes at affordable prices. In return, when they are ready to sell, participants must sell the homes to eligible households at affordable prices. This system allows many generations of homebuyers to access affordable homes
- The initial purchase and subsequent resale prices are linked to affordability at specific percentages of AMI. Therefore, owner equity is determined largely by the buying power of the new, eligible buyer at the time of resale, and not by the market value of the home.
- Units that were formerly sponsored under the San Francisco Redevelopment Agency Limited Equity Program (LEP) and subject to the asset test below.
The first $15,000 of household assets is excused; 10% of all assets between $15,001 and $100,000 will be added to the total household income; and 35% of assets above $100,001 will be added to the total household income.
Please visit the GETTING STARTED WITH LEP page for next steps.
Buyers must work with one of our "Approved Lending Officers" and should refer to the current list by clicking here.
The following documents contain critical information about MOHCD's Limited Equity Program. Start by reading the Loan Disclosure Information booklet. It can probably answer many questions you might have about the Program. If you are interested in applying for an available home, you will want to show the booklet and the loan documents to your lender.