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|Condos4Tenants: Purchase money loan
FHA/VA up to $ 220K
FNMA up to $ 253K
CRA (Community Reinvestment Act)
San Francisco City DALP loans
FNMA / CRA 1st loan at 80-90% LTV (loan to value) plus SF City loan 2nd of 5-15% LTV
1) FHA loans up to $ 220K/loan – the benefit is that unlimited amounts of FHA loan $ are available – they are federally guaranteed, securitized & sold in secondary markets. Most larger apartment buildings (eg in Lower Nob Hill) have smaller units, average 600 square ft, and will sell for prices $ 100K- 250K. (ie $ 125-400 per square foot, depending on neighborhood). Most studios and many 1BR units in SF will qualify under the FHA limits. FHA requires a 3% downpayment. FHA also has the Access program which lends the 3% for downpayment plus 2% for closing costs so that the loan is actually for more than the purchase price – this makes housing truly affordable.
2) FNMA loan programs with $ 252,700 loan limits including low downpayments (3-5%) and flexible underwriting are available. See appendices for detailed discussion of variety of FNMA options. Higher loan limits of 150% of “regular” limits ie $ 379K for high-cost areas like San Francisco are being discussed at the Federal level by HUD, FNMA etc. Some areas, like Hawaii, Alaska, Guam already have higher loan limits due to their higher prices. An excellent argument for including San Francisco in the higher limit eligibility areas can be made. This would open up the $ 400K-500K price range units for FNMA funding, also a virtually limitless pool, since they can be easily sold on the secondary market, even though not federally guaranteed. This would help tenants with larger units, and also include more of the expensive neighborhoods of the city.
3) CRA (Community ReInvestment Act) loans are currently available through lenders in the community like Bank of America, World Savings, Wells Fargo etc. as part of their stated commitment to support their local communities. They usually follow the FNMA loan limits, but there is no reason that they cannot unilaterally increase their loan amounts, either in concert with FNMA, or because local conditions or political pressure requires the higher limits.
4) Where necessary, San Francisco tax-exempt city bonds to finance the final 5-15% loan to bridge the gap between what is available through the typical loan process, and the money needed to buy a house or condominium. This will leverage city funds to maximum advantage. The approximate 2% interest spread on city funds would be used to subsidize rents for those disabled and elderly tenants who choose not to buy.
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