Hey there! Navigating the home-buying process can feel overwhelming, especially in a city like San Francisco. But don’t worry—there’s a fantastic program that might be just what you need: the Downpayment Assistance Loan Program (DALP).

Program Overview

Program Name: Downpayment Assistance Loan Program (DALP)

Source of Funding: Administered by the San Francisco Mayor’s Office of Housing and Community Development (MOHCD).

Eligibility Criteria

• First-Time Homebuyer Status: You must not have owned any residential property in the past three years. For first responders and San Francisco Unified School District (SFUSD) educators, this restriction applies specifically to properties within San Francisco.
• Income Limits: Household income must not exceed 200% of the Area Median Income (AMI). For example, the maximum income for a one-person household is $209,800, and for a four-person household, it’s $299,700.
• Homebuyer Education: Completion of a homebuyer education course from an approved provider is required.
• Minimum Contribution: You need to contribute at least 1% of the purchase price toward the down payment or closing costs, which can come from gifts if necessary.

Benefits

• Loan Amount: DALP offers a deferred-payment loan of up to $500,000 to assist with your down payment on a market-rate property in San Francisco.
• No Monthly Payments: This is a silent second loan, meaning there are no monthly payments. Repayment of the principal, along with a share of the property’s appreciation, is due upon sale or transfer.
• Additional Programs: Separate funding pools are available for first responders (FRDALP) and SFUSD educators (Educators-DALP), offering the same loan benefits.

Potential Drawbacks

• Shared Appreciation: Upon selling or transferring the property, you’ll need to repay the loan plus a share of the property’s appreciation, which could be significant if property values increase substantially.
• Owner-Occupancy Requirement: The property must be your primary residence for the duration of the loan.
• Asset Limits: Post-purchase, your liquid assets must not exceed $60,000, and you must have reserves covering at least two months of housing expenses.

Application Process

1. Homebuyer Education: Complete a homebuyer education course through Homeownership SF.
2. Pre-Approval: Obtain pre-approval from a participating lender for your mortgage loan.
3. Submit Application: Apply to DALP through the Mayor’s Office of Housing and Community Development (MOHCD). Include all required documents, including income verification and homebuyer education certification.
4. Lottery System: If demand exceeds funding, applications may be selected through a lottery system.
5. Finalize Purchase: Once approved, finalize your home purchase within the program’s stipulated timeline.

Program Type

This is a down payment assistance loan, not a grant. The loan is deferred-payment with no monthly payments.

Geographic Availability

The DALP is available only for properties within San Francisco, California.

Sources

• San Francisco Mayor’s Office of Housing and Community Development – DALP
• Homeownership SF