How to Buy A Home In SF - While Not Being Filthy Rich



It’s common knowledge that you need a bizillion dollars to buy a home in San Francisco. A slightly less known (and less fictional) fact is that homeownership is an actual possibility for us thousand-aire residents of the SF. The city of San Francisco, like some other metropolitan centers in the U.S., offers a program to help us plebeians buy decent homes within city limits. The majority of us here in the 7x7 potentially qualify but just don’t know about the option.


What is This Magical Program?


It’s called the Below Market Rate Inclusionary Housing Program (BMR). The BMR program exists because the city of San Francisco requires developers to set aside 12% of their newly developed units for sale as affordable housing. These BMR units are just like other brand new units, except that they’re specially priced to be affordable for low-to-mid-income residents.  Fun Fact: I used to screen applicants for the BMR program and teach workshops on how to buy BMRs.


While prices vary, you can currently find a handful of 1 bedroom condos listed for around $250k, and 2 bedroom condos for around $400k. Do these prices still seem outrageous? That the city offers substantial assistance to help cover the cost.



how do i qualify?




The main consideration is income. There are some exceptions, but generally speaking the maximum income allowed for a single person is roughly $71,000/year gross (that’s before taxes and other withholdings). In other words, $70k is technically considered “middle income” in SF. Congratulations, you and most of your friends are categorically poor!


The city also requires applicants to prove they make enough money to afford mortgage payments on the BMR - which is often cheaper than what you’d pay for rent in SF. This means you’ll have to show a steady history of reported income over the last couple of years (usually via W2s). This can be practically impossible for people with major gaps in employment or for contractors with fluctuating income, e.g. Lyft/Uber drivers, unless they have other forms of income. It is also difficult (but not impossible) for people earning less than about $50k/yr to find affordable BMR properties.




You must be a first time home buyer in order to take advantage of this program… so (stating the obvious here) if you already own a home or property then you won’t qualify. Yes, owning land overseas does disqualify you! Ask me about the @$$holes hiding property overseas sometime. The good news: if you haven’t owned any share of property in the last three years you are technically considered a first time buyer. Who knew?!


You’ll also be subject to an “asset test”. This is a comprehensive overview of all your assets to determine their total value and to make sure you actually need assistance. You are allowed (and encouraged) to maintain cash assets after you’ve covered your down payment and closing costs - but generally not more than $60k. You also can’t just dump money off somewhere in order to appear qualified. Ask me about the @$$hole who bought a luxury car to "hide" cash.



Down Payment


You’ll be required contribute 3-5% of the unit’s total cost for your down payment. For a $250k condo that would be between $7.5k and $12k. Plus you’ll have to cover closing costs (which vary, but should cost at least another $3k or more). The city offers a variety of down payment assistance options to help cover part of the expense and bring your monthly payments down, including additional loans for some teachers and first responders. Each loan varies, but generally they’re interest free and don’t have to be paid back for 30-40 years. You can also use gift funds (money given to you that does not have to be paid back) from a family member to help cover part of your down payment.




Your credit reports and scores will be reviewed during your financial counseling session. In order to become certified for the program your FICO credit scores have to be above 700. While many requirements of the program are flexible, this one is not. Need to build credit? I wrote an article with some pointers. Need someone to help you make improvements? Contact me here.



The Catch... and Why It’s Still Worth It


A lot of people who know about this program think it’s a bad deal. It's commonly believed that BMR buyers don’t fully own their homes and won’t profit from their sale or appreciation (meaning its increase in value). This is a misconception. There are some stipulations that limit your freedom - for example, you’re not allowed to have renters in the unit - however BMR owners do earn equity and they do profit from the sale of the home. They just don’t pocket 100% of the money.


If/when you decide to sell the property you’ll have to share some of the profit. Whatever percentage of the total purchase price the city helped you cover, they’ll want that same percent of the selling price back (don't feel dumb if you have to read that twice). In other words, if they helped you cover 25% of the total purchase price, you’ll have to give them 25% of the total selling price. While it’s not ideal to share your stash with anyone, consider that you would not have been able to buy the home without the city’s help.



How Do I Sign Up?


You'll have to follow these steps, in order:


  1. Register for and attend the required homebuyer education workshops

  2. Complete a two hour financial counseling session 

  3. Get approved for a loan by a city-approved lender


Once you complete the requirements you’ll receive a certificate and you can enter the lottery for the BMR unit of your choosing. You don’t have to be an SF resident to enter the lottery, but residents do get preferential treatment. 


In terms of winning the lottery, it’s just a matter of time. The city doesn’t release figures stating how many people enter each lottery or how long the average applicant waits to be chosen. During my time working with the program I found there were usually between 15-90 lottery entrants for each unit and buyers generally waited a year or less to be picked.



Run, Don’t Walk


When it comes to purchasing your BMR, time is of the essence. Completing all of the requirements can be a bit of a process. In the meantime a property you’re qualified for (and you're in love with) could get snagged up by another buyer. I’ve seen it happen!  If you really are interested, or even just curious, get the ball rolling now. Even if you don’t end up buying a BMR you’ll end up with some really valuable (and free) information.



Not sure if BMRs are right for you? Let's discuss your options.

Contact me to set up a free phone consultation.


Got general questions or feedback? Please leave a comment below!



DISCLAIMER: Requirements for the BMR program are subject to frequent change.

To see the most up-to-date information visit