San Francisco Down Payment Assistance and First-Time Homebuyer Programs

San Francisco bills itself as our nation’s technology capital, but there’s more to like here than just innovation and startups. San Francisco is the crown jewel of the Bay Area, and has a world class food and art scene. Historic neighborhoods like Chinatown and the Mission District, offer endless exploration opportunities. Furthermore, San Francisco prides itself on a progressive ethos and diverse community. If you’re itching to escape the city, there are plenty of opportunities for hiking, water sports and more. If you’re looking to buy a home in San Francisco, average prices are high, about $1.3 million. Luckily, there are mortgage options with down payment assistance to explore.

Down payment assistance programs in San Francisco

Down payment assistance and first time home buyer programs aim to help home buyers make a larger down payment, cover closing costs, or a combination of both. There are several types of home buyer benefits, including grants, forgivable loans, and interest rate reductions and tax credits.

A grant is similar to a scholarship for college. You apply, and if you qualify for the program (i.e. meet all the criteria and the entity still has the money), you can receive funds toward your down payment or for another upfront cost related to your home purchase. 

A down payment loan (or second mortgage loan) is a loan you acquire in order to have the funds for a down payment. Many loan types require a minimum down payment between 3% and 20%. If you don’t have this money saved (many first-time home buyers don’t) then a down payment loan is an option to help you qualify. Some loans are even forgivable if you meet certain requirements like staying in the home for a few years.

Less commonly, some programs come with lower interest rates and tax credits (e.g., mortgage credit certificates) to help lower your monthly payments.

San Francisco Downpayment Assistance Loan Program

Amid the housing crisis, San Francisco has developed to have one of the most expensive real estate markets in California and the entire country. Thankfully, the San Francisco Downpayment Assistance Loan Program aims to assist moderate to low-income individuals in purchasing their first home within the city.

Assistance type: Deferred payment loan

Sponsor: City of San Francisco

Assistance amount: $500,000

Purchase price limit: None

Minimum borrower contribution: 1% of the purchase price 

Eligibility requirements

• Specific to first-time home buyers.
• The applicant’s household income must not exceed 200% of the AMI.
• Applicants must attend homebuyer education and get a mortgage loan pre-approval letter from an approved lender.

Statewide down payment assistance programs available in San Francisco

CALHFA Homeownership Program

The California Housing Finance Agency (CALHFA) provides assistance programs for low- and moderate-income first-time homebuyers to help with down payments and closing costs. The program offers several options, like the MyHome Assistance Program, which offers deferred FHA loans of up to 3.5% of the purchase price. CALHFA assistance can also be used alongside the Dream For All Conventional first mortgage.

Assistance type: Deferred payment loan

Sponsor: CALHFA

Assistance amount: 3.5% of the purchase price for FHA loans and 3% for conventional loans

Minimum borrower contribution: None

Eligibility requirements

• Applicants must meet the credit requirements, CALHFA income limits, and loan requirements set by an approved lender and mortgage insurer.
• The property you purchase must be your primary residence.
• Applicants must complete Homebuyer Education Counseling and obtain a certificate of completion through an eligible homebuyer counseling organization.

GSFA DownPayment Assistance Program

The Golden State Finance Authority Downpayment Assistance programs are assistance loans that help homebuyers with the down payment and closing costs on the purchase or refinance of a primary residence in California. GSFA offers platinum and golden assistance opportunities to help you purchase a home sooner than you thought possible. This loan option can be combined with the Mortgage Credit Certificate tax credit.

Assistance type: Deferred forgivable loan, Second mortgage

Sponsor: Golden State Finance Authority

Assistance amount: Financial assistance up to 5.5% of the First Mortgage Loan amount

Minimum borrower contribution: None

Eligibility requirements

• Financial assistance up to 5.5% of the First Mortgage Loan Amount
• FICO scores as low as 640 can qualify, and DTIs up to 50% are allowed in some circumstances.
• Various First Mortgage Loan types are available to fit the homebuyer’s needs, including FHA, VA, USDA, and conventional financing.

Disclaimer: This article is for informational purposes only and should not be considered as legal or financial advice. Please consult an attorney, mortgage lender, or CPA for guidance on your specific situation.