Are you a San Francisco resident who dreams of owning a home in the city, but feels the up-front costs are out of reach? Fortunately the City and County of San Francisco offers three lottery-based down payment assistance programs for up to $375,000: the Downpayment Assistance Loan Program (DALP), Educators-DALP, and First Responders Downpayment Assistance Loan Program (FRDALP). For all three, you don’t have to make any payments on the loan for 30 years or until the property is sold. In return, you pay back the principal amount plus a share of appreciation in the property’s value.
Mosaik Real Estate believes in the value of homeownership, and wants to make it a reality for as many people as possible. We are proud to have helped 18 first-time buyers purchase the home of their dreams using these three programs.
In this blog post, we cover what you need to know about DALP. If are interested in applying for DALP, here are the main steps:
1. Determine Your Eligibility
In order to be eligible any homebuyer assistance program, the city requires you meet certain criteria (listed here). You must be:
- A first-time homebuyer
- Complete approved homebuyer education
- Pre-approved for a mortgage loan by an approved lender
- Have enough in savings for closing costs and downpayment (as determined by a city housing counselor)
Income eligibility is program-specific. For DALP, your household income cannot exceed 175% of the Area Media Income (AMI) for your family size. This is a sliding scale (full chart for 2019 available here), but here is a snapshot based on some typical family sizes:
Maximum Income Levels for FRDALP Eligibility
|Household Size||175% AMI in 2019|
In addition, you must contribute a minimum of 3% (1.5% of your own funds, and remainder from gifts or grants) toward the down payment.
2. Monitor Annual Deadline
DALP is administered annually with a clear application deadline. However, because of COVID-19, the normal program dates for 2020 have been delayed. The city expects the application window to open in July and go on for at least 45 days. You can sign up for this mailing list to receive official updates about application opening and closing dates.
Once the application window is open, DALP will begin accepting applications. Given our experience working with 18 successful recipients of the city’s homebuyer assistance programs, we would be happy to help guide you through each step of the application process.
4. After You Apply
Assuming you apply before the application deadline, you will receive a lottery number. As a DALP candidate, you would be selected in lottery rank order after candidates for both FRDALP and Educators-DALP. If you are selected and approved, you can use the loan on a downpayment for any property on the open market. Successful recipients of DALP financing should be aware of three things:
- Purchasing, review, and closing may take up to 5 months.
- You have 60 days to enter a sales contract.
- There is a nonrefundable fee ($646 in 2019-2020) to process the paperwork. This will be collected when DALP funds are reserved for you to close on a property.
DALP is an amazing program for would-be homeowners in San Francisco, but as you can see, there are many steps involved. If you are interested in learning more about the program from a team with a great track record, get in touch using the form below: