Below Market Rate (BMR) Ownership Programs

BMR Ownership Programs help first time homebuyers who are low, moderate, and middle-income. BMR homes are specified units in San Francisco sold at below market rate prices. 

They are also resold at below market rate prices to future eligible buyers. BMR homeowners must work with MOHCD to sell their homes.

These homes are typically condominium units in mixed income buildings, with monthly Homeowner's Association (HOA) dues. Be aware that HOA dues can increase over time beyond the pace of inflation.

MOHCD manages 3 types of BMR Ownership Programs:

Interested buyers apply separately for each listing. Buyer applications are selected through a lottery process.

See all BMR homebuyer listings

Rules across all BMR ownership programs:

Buyer eligibility

  • First-time homebuyers: No member of a household must have had any ownership interest in a residential property for the last three years.
  • Completed homebuyer education: Everyone listed on the loan and title must complete homebuyer education from a MOHCD-approved housing counseling agency, on Homeownershipsf.org
  • Maximum Income Limits: Total household income must not exceed the posted Area Median Income (AMI) of the unit.
    • All sources of income of all household members 18 years or older who will be living in the BMR unit, must be included in the determination of income.
    • To calculate household income, MOHCD will generally use the greater of either:
      • Current total annual income from all sources projected 12 months forward; or
      • Total gross annual income from all sources earned in the last tax year.
  • Asset test: MOHCD adjusts actual household income based on the level of savings, investments and other liquid assets. 
    • If a household contributes 20% or more of the purchase price towards the downpayment, the greater of the following amounts will be excluded from the asset test calculations: 20% of purchase price or the first $60,000. 
    • If a household contributes less than 20% of the purchase price towards the downpayment, only the first $60,000 will be excluded from the asset test calculations. 
    • Any remaining liquid assets will be multiplied by 10% and added to the total household income.
  • Occupancy: The home must be owner-occupied as primary residence. Renting out any portion of the unit is not allowed.
  • Household size requirements: MOHCD requires a minimum of one person per bedroom. For example, a 1-person household cannot buy a 2-bedroom home.
    • There are no limitations to buy a home that has fewer bedrooms than the household size. However, the maximum household size must adhere to maximum occupancy requirements of the San Francisco Building Code. 
    • Unborn children are not counted into household size. 
    • Applicants who have 30% custody of children may count the children into household size. You will need evidence of a court-ordered custody agreement.
  • Title Requirements:  All household members aged 18 or older must appear on the title of the property and be co-applicants on the mortgage. The following exceptions apply:
    • Dependents: household members who are listed as dependents of titleholders on the 2 most recent tax returns. Spouses and Domestic Partners are not considered dependents.
    • Children of a titleholder: A household member younger than 24 who is the child of a titleholder and will reside in the property as their primary residence, regardless of being named as a dependent on the tax returns.
    • Non-owner Occupants: If an occupant intends to live at the home temporarily, is not counted toward unit size minimums, and adding their income does not change the buyers' eligibility.
      • This occupant intends to live at the home for less than the duration of ownership.

Financing Requirements

  • Minimum Downpayment
    • Buyer must contribute a minimum of 3% to the downpayment. 
    • The entire downpayment and closing costs can come from gift funds. 
  • LTV/CLTV Ratio 
    • Minimum Loan to Value Ratio: 50% 
    • Maximum Combined Loan to Value Ratio: 97%
  • Debt Ratios
    • Front-end or housing ratio: no lower than 28%, and no higher than 40%
      • MOHCD may consider a maximum front-end ratio of up to 43% if the applicant has at least 2 of the following:
        • Proven ability to devote a larger amount of income to housing expenses. The applicant has made rental payments for 12 consecutive months that are equal to or greater than the proposed monthly payments for the housing being purchased
        • At least 12 months of housing expenses in reserves through non-liquid assets and retirement accounts
        • FICO score greater than 700
        • The proposed housing expenses will not increase more than 5% over previous housing expenses
    • Back-end ratio or total debt-to-income (DTI) ratio: no higher than 45%
  • Reserves
    • 3 month’s housing payments in reserves after purchase
      • Housing payments include principal, interest, property taxes, hazard insurance, and homeowners association dues
  • First Mortgage
    • 30-year loan term
    • Buyers must get financing from an MOHCD-approved lender.
    • Fixed interest rate with fully amortizing mortgage payments
    • FHA, CalHFA, or VA first mortgage financing: MOHCD does not have restrictions on these loan types, but they are typically not compatible with MOHCD BMR programs
    • Loan Types not allowed: Stated income, ARM (adjustable rate mortgage), reverse mortgage, interest-only, negative amortizing, and balloon payments. MOHCD reserves the right to identify additional prohibited loan types. 
  • Interest Rates and Fees
    • First mortgage interest rate and other fees associated with the transaction must be usual, customary and reasonable
    • No upfront fees (except third party credit reporting, appraisal and inspection fees)
  • FICO Score
    • MOHCD does not have a minimum FICO score for BMR buyers
    • Lenders determine the minimum FICO score according to their own guidelines and loan products
  • Co-Signing: Co-signing is not allowed
  • Third Party Credits and Contributions
    • Credits and contributions from a third party are allowed for non-recurring closing costs and/or prepaids. Third parties include the seller, realtor, and lender.
    • All credits must be used in escrow
  • Impound Account: Taxes and insurance impound account is required
  • Appraisal Report
    • A Fair Market Appraisal report using only market rate units as comparable is required
    • The report must be no more than 90 days old at the time of submission of lender package to MOHCD
  • Loan Prepayment
    • BMR Owners may prepay first mortgage loans before the loan term but BMR Owners who also have Below Market Rate Downpayment Assistance Loan Program (BMR DALP) loans from the City may be required to repay the BMR DALP loan at that point. Refer to the BMR-DALP program manual for details.
  • Upgrades, storage units, and additional spaces, including second parking spaces:
    • Must be financed separately from the financing of the property
    • Cannot be added to the resale price when the owner sells
    • Must be sold separately from the property when the owner sells
    • Are the sole responsibility of the BMR owner
    • Are not allowed when purchasing with City provided downpayment assistance funds

See additional downpayment help

See information for lenders »

Restrictions

All restrictions are in place for the life of the property. The owner's program documents may have exceptions to these restrictions.

  • Re-selling: An owner must work with MOHCD to set the sales price of their home. MOHCD will choose an eligible buyer through a lottery process. See the resale process »
  • Capital Improvements: An owner can begin claiming capital improvements to maintain the quality of their home, 10 years after the property's initial sale. Apply for capital improvements approval »
  • Occupancy Requirements: The home must be owner-occupied as primary residence. Renting out a BMR home is not allowed.
  • Title changes: MOHCD must approve all changes to the title on a BMR home. Apply for a title change »
  • Refinancing: BMR owners must work with a MOHCD-approved lender to refinance their mortgage. MOHCD must approve all refinancing. Apply for a refinance »
  • Estate planning: Inheritance is limited. 
    • When all BMR owners on title have died, the BMR home may be transferred by inheritance, will, or any other function of law to a child, spouse or domestic partner not on title.
    • The child or spouse must fulfill BMR eligibility criteria. 
    • The qualifying transferee must work with MOHCD to complete the transfer process within 1 year of the death of the BMR owners.