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What's the Deal With Below Market Rate Condos?

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[Unit #305 at 4800 3rd Street is a BMR asking $286,128]

Here's the super skinny info for you first-time homebuyers out there looking for some guidance on BMRs, aka Below Market Rate units.

BMRs are cheaper than your regular ol' property in San Francisco. You can peruse the latest BMRs listed at the Mayor's Office of Housing website. You must be a first time homebuyer to qualify and you cannot make more than 90 percent AMI, or area media income. For reference, in San Francisco the AMI for a single person between 80 and 120 percent of AMI is $57,700 and $86,500. For two people in SF it's $65,000 and $98,900.

Generally speaking, most BMRs tend to concentrate in neighborhoods like Bayview, the Western Addition, and SoMa. But, there is more diversity in available BMR property than you might think.

Right now, for example,, a one-stop shop and a MUST website for first time homebuyers, is listing a BMR for $199,000 in Bayview. We should mention that there's a lottery to get at these properties.

Some assistance:

A DALP is a down payment assistance loan program for low- to moderate-income first time homebuyers. A buyer utilizing a DALP cannot exceed 120 percent AMI.

There are several other programs in San Francisco for first time homebuyers that help with down payments and lowering mortgage costs, while some also assist police and teachers working in the city. Check 'em all out if you think you may qualify.

Some of the programs you can mix and match, others you cannot. As part of the requirement for any of these programs, you must speak with a home counselor, as well as go through a home buying education workshop. Your counselor will be able to tell you the programs you can layer to maximize buying power.

Outside of San Francisco the resources and the programs tend to shrink in variety and funding. Oakland and Berkeley, for example, only offer CalHomes as city programs. CalHomes basically extends a first time homebuyers purchasing power.

The Community Housing Development Corporation (CHDC), which is a housing organization in the East Bay, has a program called CC Match. This program will match a first time homebuyer's savings up to $5,000 three times. So, if the buyer has $5,000, through this program they could then have $20,000 to put toward the purchase of a home. As part of the guidelines for CC Match, you have to be living in Contra Costa County.

If you're still looking for something else in another city, the U.S. Department of Housing and Development website breaks down various cities in California that have programs.

If any of this piqued your interest and now you want to buy, well, put aside six to eight hours. Participants must go through a home buying education workshop. No matter where you want to go. You can't skip it. Many of these programs will also help first time home buyers increase their buying capacity through credit repair, debt management, and other types of financial counseling.

The various organizations have schedules of when workshops are taking place. There are handfuls in San Francisco and has a handy calendar listing them all.

A few tips from the credit counselors we spoke with: Once you get to the table to talk to a lender, and you're looking at a BMR, ask them how many BMRs they've closed in the last six months. Maria Benjamin, executive director of the CHDC said that many of these lenders, though they are approved to work with these types of programs, might never actually deal with them. The more experience the lender has with these programs, the better for the buyer.

If entering the BMR lottery, get a preapproval letter first. Josie Ramirez, the executive director of, said that many of the applicants in the BMR lottery might not be preapproved. Preapproval is basically the lender saying everything is ready to go, you have this much buying power, go get that property. Having that preapproval is like Willy Wonka's Golden Ticket.

- Terry Parris
· Current Listings: Below Market Rate Ownership Units [Mayor's Office of Housing]
· Below Market Rate (BMR) Inclusionary Housing Program [Mayor's Office of Housing]
· housing & community development - Oakland [website]
· Berkeley Housing Authority [website]
· Community Housing Development Corporation [website]
· Homebuyer Programs Sorted by City [HUD]