Hey there! Navigating the home-buying process can feel overwhelming, especially in a competitive market like Berkeley. But don’t worry—I’m here to help you understand a fantastic opportunity that could make your dream of owning a home more attainable.

What is the Program?

The City of Berkeley offers a Below Market Rate (BMR) Homeownership Program designed to assist first-time homebuyers by providing access to homes priced below the market rate. This initiative aims to make homeownership more affordable for low- to moderate-income households.

Funding Source

This program is funded through agreements between the City of Berkeley and property developers. Developers set aside a percentage of units at affordable prices as part of the city’s Inclusionary Housing Ordinance.

Eligibility Criteria

• First-Time Homebuyer: You haven’t had an ownership interest in a principal residence for at least three years before purchasing the property. Exceptions include single parents or displaced homemakers who previously owned a home with a spouse.
• Income Limits: Your household income must not exceed 80% of the Area Median Income (AMI) for most units, or 120% of AMI for Limited Equity Cooperatives, as established by the U.S. Department of Housing and Urban Development.
• Occupancy: You must occupy the purchased unit as your primary, sole residence within 60 days of purchase.
• Down Payment: A minimum down payment of 5% of the purchase price is required, with at least 3% coming from your own funds.
• Preference: Priority is given to applicants who live or work in the City of Berkeley.

Benefits

• Affordable Homeownership: Purchase homes at prices below the market rate, making ownership more accessible.
• Equity Building: Opportunity to build equity over time, even with resale restrictions in place.
• Community Stability: Encourages long-term residency and investment in the Berkeley community.

Potential Drawbacks

• Resale Restrictions: When selling a BMR unit, the maximum resale price is limited to maintain affordability for future buyers. This means potential gains from property value appreciation are capped.
• Limited Availability: There are a limited number of BMR units, making the program competitive.

Application Process

1. Find a BMR Unit: Identify available BMR units through real estate listings or by contacting the City of Berkeley’s Housing Department.
2. Prepare Documentation: Gather necessary documents, including proof of income, employment, and first-time homebuyer status.
3. Submit Application: Apply directly to the property owner or their agent, following the guidelines provided by the City of Berkeley.
4. City Review: The City will review your eligibility based on the submitted documentation.
5. Purchase Agreement: If approved, proceed with the purchase, ensuring compliance with all program requirements, including signing a resale restriction agreement.

Program Type

This program offers access to below-market-rate homes and does not provide direct grants or down payment assistance.

Learn More

For more information, visit the official City of Berkeley Housing Programs page.

Category

California

Subcategory

Alameda County – City of Berkeley