First Responders Downpayment Assistance Loan Program (FRDALP)
The First Responders Downpayment Assistance Loan Program (FRDALP) is available through MOHCD Approved Participating Lenders Only
Click here for the Participating Lender List
The First Responders Downpayment Assistance Loan Program (FRDALP) provides downpayment assistance loans to active uniformed, sworn members of the San Francisco Police Department (SFPD), San Francisco Fire Department (SFFD) and San Francisco Sheriff’s Department (SFSD) to purchase their first home in the City and County of San Francisco. Loan funds have been made available through the Housing Trust Fund. The FRDALP is a silent second loan that requires no payments for 30 years. The principal amount plus a share of the appreciation (profit) shall become due and payable at the end of the term, or repaid upon sale, transfer or rental of the property.
Maximum Loan Amount
Owner Occupancy Requirements
FRDALP Application Process
FRDALP Program Manual and Forms
Review and Processing
Homebuyer Education Counseling Agencies
To be eligible for a FRDALP loan, a borrower must be an active uniformed, sworn member of the San Francisco Police Department, San Francisco Fire Department, or the San Francisco Sheriff’s Department. Borrower must be able to obtain and submit a written verification of employment from their department or authorize DHR to provide equivalent verification directly to MOHCD.
Each household is limited to one loan, regardless of the number of First Responders in that household.
First-time homebuyer: Borrower must not have owned any interest in a principal residence in San Francisco during the last three years. Borrower also must not own an interest in any other principal residence at close of escrow.
Meet income limits: Household income is limited to 200% of the Area Median Income.
The following lists the maximum income limits as of January 1, 2014:
- The combined income of all household members who will be living in the property must be included in the determination of income. The combined household's income must be projected as an annual income. It should be assumed that the current income would continue for the next 12 months, unless there is verifiable evidence to the contrary.
- Household income requirements will include all income of persons 18 years old or older who will be living in the property. Maximum loan limits are tied to the household income category.
Minimum Downpayment: Borrower must have at least 5% downpayment contribution towards the purchase price. A minimum of 3% must come from the borrower's own funds. The remaining 2% can be from gift funds.
First Mortgage: Borrower must be able to obtain a first mortgage loan approval and loan commitment from a MOHCD Participating Lender. First mortgage must be 30 years fixed rate, fully amortizing mortgage.
Debt-to-Income Ratio: Borrower must have a higher than 28% front-end debt-ratio (housing cost which includes: principal, interest, taxes, insurances and homeowners association dues) and not to exceed 43% back-end debt-ratio (housing cost plus all other unsecured debt) over a borrower's gross monthly income. If you don't understand this DTI ratio, your lender will explain it to you.
Asset/Reserve Limitation: The combined household liquid assets after purchase of property cannot exceed $100,000. All other liquid cash assets above $100,000 must be used towards the purchase first. Liquid Assets include all sources of monies from savings, checking accounts, or investments held by any occupant of the Borrower's household, including minors and any fund that is available to liquidate. Liquid Assets do not include funds held in pension accounts, retirement funds, 401(k) plans, or similar assets which are not available for liquidation without substantial financial penalty to the Borrower.
Homebuyer Education Requirement: Borrower must complete a home buyer counseling course from one of MOHCD's participating non-profit housing counseling agencies. A certificate of completion of homebuyer education must be included with the application package. First-time homebuyer counseling is required for all City Down Payment Assistance Loans.
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Properties purchased with FRDALP funds must be single family residences (which include condominiums and townhouses) located in the City and County of San Francisco only. Commercial properties, mixed-use or investment properties are not allowed.
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MAXIMUM LOAN AMOUNT
The maximum loan amount available for FRDALP loans is up to $100,000 or 15% of the purchase price, whichever is less. Applicants may apply for less than $100,000.
Qualifying loan amount is based upon a graduated scale. Loan amount will be decreased by $20,000 for every additional $100,000 contributed by the borrower above a 20% downpayment.
Maximum Combined Loan-to-Value Requirements: Maximum Combined Loan-to-Value Ratio (CLTV) cannot exceed 95% of the purchase price, which includes the first mortgage, the FR-DALP loan and any other borrowed subordinate financing.
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The loan must be used for downpayment only (no closing costs).
Loan is deferred for 30 years, due on sale, rent or title transfer. Borrower must remain an active member of the SFPD, SFFD, or SFSD for a minimum of five years from the date the home is purchased. Should borrower's status change prior to five years, the full amount of the loan, plus share of appreciation is immediately due.
There is no prepayment penalty to repay this loan prior to the due date.
Repayment amount will include the principal loan amount plus share of appreciation of the property. The appreciation is calculated by subtracting the original sales price from the current sales price or the current appraised market value. The share of appreciation is computed as a ratio of the City loan amount to the purchase price, that is, if the loan amount equals 15% of the purchase price, the share appreciation is 15%. If the borrower receives the FRDALP loan in the amount of $100,000 with the purchase price of $667,000, the share appreciation would be 15%.
Refinance/Subordination: The City loan can be subordinated to refinance the existing first mortgage for a lower interest rate and better loan terms as long as no cash equity is taken out of the property. All refinances must meet MOHCD's subordination requirements and be approved by MOHCD. All borrowers must work with loan officers or lenders on our list of participating lenders for refinance. This ensures awareness of full restrictions on the property and expedites the request process.
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OWNER OCCUPANCY REQUIREMENTS
Owner must occupy the property as principal residence within 60 days after close of escrow. Property must be owner-occupied at all times throughout the term of the loan. Compliance monitoring will be performed and documented proof of occupancy required at intervals determined by the Mayor's Office of Housing and Community Development.
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The City will provide the required loan documents to the title company for borrower's signatures.
City Deed of Trust: The City Deed secures the loan against the title of the property. The City loan will subordinate to first mortgage, the City loan will always be on the second lien of the property.
City Note: The City Note contains an acceleration clause, which will call the entire loan due and payable upon the sale; rental and title transfer of the property. The City Note also outlines terms of repayments.
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FRDALP APPLICATION PROCESS
- The borrower must complete the first-time homebuyer education course through one of MOHCD’s approved housing counseling agencies. A certificate of completion of homebuyer education must be included with the application package.
- Borrower must work with one of the participating lenders to get pre-approval or pre-qualification.
- Find a property, enter a purchase agreement.
- Once the Borrower have a ratified purchase agreement, go back to the lender to submit the following documents:
- FRDALP Final Approval Application (FRDALP-1)
- Complete set of past 3 years Federal income tax returns (included all schedules, signed and dated) and W-2 forms.
- 3 current and consecutive pay stubs with year-to-date (YTD)
- For self-employment co-borrower, provide a current profit and loss statement (signed and dated) and sign and notarize a Self-Employed Affidavit
- Unemployed co-borrower must sign and notarize an Unemployed Affidavit
- Income Tax Affidavit (DALP-3) (if applicable)
- First Time Homebuyer Affidavit (FRDALP-4)
- All pages of last 3 month bank statement for checking, savings & other pertinent investment accounts
- Gift letter (if applicable)
- Homeownership SF Consent Form
- IRS form 4506-T
- $530 Application Fee; (must be a Cashier’s Check payable to the City and County of San Francisco)
- Lender will submit the FRDALP application package to the City and provide the following information along with the application:
- Copy of Final Mortgage Loan Application (Form 1003), signed and dated by borrower
- Underwriting Summary (Form1008)
- Approval or commitment letter from the Lender
- A copy of the borrower’s credit report (including credit score)
- A copy of final Good Faith Estimate (GFE) or Estimated Settlement Statement (HUD-1)
- Fair Market Appraisal
- Preliminary title report
- MOHCD will email a letter of approval or denial to the borrower and lender within 10-15 working days of receipt a complete package from the lender. FRDALP Loan as specified in the commitment letter will be placed on reserve for a period of 45 days from date of the commitment.
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FRDALP PROGRAM MANUAL & FORMS
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REVIEW AND PROCESSING
MOHCD receives a complete and bound application in a legal size manila folder with two fasteners (application follows instructions suggested on Transmittal Form)
- MOHCD will email an approval or denial letter to the lender within 10-15 working days of receipt of a complete package. Incomplete packages will be returned without review.
- Email notice includes draft loan documents and a request for buyer(s) to sign & date a commitment letter, which must be returned to the City within 5 working days.
- After MOHCD receives the signed commitment letter back from the borrowers:
- MOHCD will email escrow instructions and closing documents to the title company.
- 7 working days funding period will begin.
- Funding as specified in the commitment letter will be placed on reserve for a period of 45 days from date of the commitment. If for any reason, escrow cannot close within the commitment period, please notify the Mayor’s Office of Housing and Community Development immediately or the loan will be void.
- Funding will be wired to the escrow account after we have received and reviewed all closing documents by 11 a.m. the fund will be wired in the 3rd working days. If we receive the closing documents after 11 a.m. the fund will be wired on the 4th working day. We require 3 working days for wire transfer.
- Attention All Title Companies: The Mayor’s Office of Housing and Community Development requires that all beneficiaries, vendors or Title Companies register for ACH pay mode for Electronic Funds Transfer. This is standard for all of our funding transactions. For information and enroll to the ACH pay mode system, please visit the San Francisco Controller’s Office website.
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Click for List of FRDALP Participating Lenders
Click for List of Homebuyer Education Counseling Agencies
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