© 2020 Fannie Mae 

Creating Equity and Stability for Lower-Income 

San Franciscans Through Homeownership

By: Carolina Reid and William Wilcox

Terner Center for Housing Innovation

University of California, Berkeley

 

 
© 2020 Fannie Mae 3.26.20 Page 2 of 18

In 2018, the median price for a condominium in San Francisco was $1.25 million. This is well out of reach of most households: it 

would require a monthly mortgage payment of almost $6,000 a month, even after a quarter of a million dollar down payment.i

Rising house prices and a widening gap in wages in the city have put the dream of homeownership out of reach for most low- and 

middle-income San Franciscans. 

To promote more equitable homeownership outcomes, the San Francisco Mayor’s Office of Housing and Community 

Development (SF-MOHCD) assists lower-income households to buy a home in the city through their Below Market Rate (BMR) 

Inclusionary Housing Program. SF-MOHCD’s inclusionary housing program started in 1992, and is now one of the largest shared 

equity homeownership programs in the country.ii As of June 2019, the program includes 1,900 ownership units, all sold to 

households earning no more than 120 percent of the Area Median Income (AMI).

An evaluation published in 2010 was largely positive, showing that homeowners in the program benefit from modest equity 

accumulation while preserving affordability of the units over the long-term.iii That study illustrated that while the equity returns 

for households in the program were less than on market rate properties, the returns still exceeded what households could have 

gained by investing their down payment in the stock market or Treasury Bonds. However, the last ten years have been a 

tumultuous period in the housing market in California, including a deep and severe foreclosure crisis, followed by both a 

tightened credit box and a rapid and explosive growth in home values. In this case study, we explore what these developments

have meant for the BMR program and its participants, and present lessons learned from San Francisco’s experience that could be 

helpful for other cities seeking to develop shared-equity programs. 

We begin the case study by providing an overview of shared equity programs: although these have often been thought of in the 

context of community land trusts or programs led by nonprofits, shared equity is a term that can apply to a diverse range of 

programs that seek to expand access to homeownership while retaining affordability of the units over the long-term. We then 

describe San Francisco’s BMR program, showing how SF-MOHCD has adapted the program to better meet resident and lender 

needs. Drawing on data analysis and interviews with lenders, program staff and outside experts,iv the report examines the

success of the program, what best practices can be replicated by other programs, and what changes could be made, with a 

specific focus on increasing the availability of mortgage lending to borrowers in the program. 

Background on Shared Equity Homeownership Programs

San Francisco’s Inclusionary BMR program is known as a shared equity model. Shared equity homeownership programs, unlike 

down payment assistance programs, preserve the subsidy for the next buyer.v In a shared equity program, the deed restriction 

includes a resale formula limiting the maximum amount for which the property can be sold.vi The resale restrictions then ensure 

that the unit remains affordable for the next household, which preserves the locality’s initial investment in subsidizing the

property.

Shared equity includes a number of program types such as community land trusts, limited equity cooperatives, and deed 

restricted affordable housing. In San Francisco’s program, the city doesn’t actually “share” in the equity returns. Rather, 

developers building market-rate condos are required to set aside a percentage of units for lower-income borrowers. Buyers of 

these units are able to receive a share of the appreciation in value of the property if they sell (compared to the market value of the 

unit if it was not in the program), but the resale amount is limited so that the unit remains affordable to the next buyer. In effect, 

the city is retaining some of the price appreciation to reinvest in a future lower-income household. The affordability requirements 

for the current and future owners are written into the deed for the property, which legally ensures the ongoing affordability for 

the unit.vii

Inclusionary BMR homeownership programs exist across the United States in communities ranging from rural Utah to urban 

centers such as San Francisco and Washington DC. Research has shown that homebuyers in shared equity programs earn 

competitive returns on their housing investment while complying with long-term affordability restrictions, and that delinquency 

and foreclosure rates are low. viii Research has also illustrated that homes remain affordable to future low-income homebuyers. 

As a result, shared equity models are increasing in popularity as a sustainable way to increase access to homeownership for 

lower-income households.

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

This [case study/publication] was prepared at the request of, and leverages in part data and information provided by, Fannie Mae. The 

authors are solely responsible for its content and findings, which do not necessarily reflect the opinions of Fannie Mae.
© 2020 Fannie Mae 3.26.20 Page 3 of 18

An Overview of San Francisco’s Below Market Rate Homeownership Program

The San Francisco Mayor’s Office of Housing and Community Development’s inclusionary housing program started in 1992, and is 

now one of the largest shared equity homeownership programs in the country.ix As of June 2019, the inclusionary housing 

program includes over 1,300 ownership units.x (Figure 1) There are additional permanently affordable ownership units in the 

city’s Limited Equity Program and Condo Conversion programs.xi The BMR inclusionary homeownership program has and 

continues to provide a route to homeownership for lower income households in a city that has seen property values rapidly 

increase. 

San Francisco’s inclusionary program allows developers of new market-rate buildings to choose among different inclusionary 

requirements: they can build on site BMR units, build off site BMR units, pay a fee, donate land (in some cases depending on 

project location), or offer some combination of those options. If they choose to pay a fee, the cost is based on square footage and 

the funds are then used by SFMOHCD to fund other affordable housing.xii The majority of developers choose on-site BMR units, 

followed by paying the in lieu of fee. (Table 1) In general, developers of ownership (condominium) projects tend to choose on-site 

BMR units. 

Figure 1: Map of San Francisco’s Inclusionary Projects with Ownership Units

Table 1: Distribution of San Francisco Inclusionary Projects

Inclusionary Option Overall Ownership / Condominiums

On Site BMR 68.5% 79.1%

In Lieu of Fee 23.4% 11.0%

Off Site BMR 3.5% 6.2%
© 2020 Fannie Mae 3.26.20 Page 4 of 18

Land 1.0% 0.5%

Combination 3.0% 1.9%

Source: Terner Center calculations of SF Open Dataxiii

The program sets the affordability levels and percentage of BMR units required by the size of the project. Table 2 summarizes the 

requirements for ownership projects. In recent years, the city has responded to the growing affordability crisis by raising the 

inclusionary requirements over time using a “phased” approach. Ultimately, developers of condo buildings will need to set aside 

15% of units in smaller buildings (10-24 units) and 26% of units in larger buildings (25 or more units) for affordable 

homeownership.

Table 2: Percentage of Affordable Units Required in New Condominium Buildingsxiv

10-24 Units Household Income Level Percentage of 

Units*

Sales price set 

at

Allowable 

household 

income up to

Low Income Households 13% of units in 

project

80 AMI 100 AMI

25 or more units Household Income Level Percentage of 

Units**

Sales price set 

at

Allowable 

household 

income up to

Low Income Households 10% of units in 

project

80 AMI 100 AMI

Moderate Income Households 5% of units in 

project

105 AMI 95-120 AMI

Middle Income Households 5% of units in 

project

130 AMI (min 

occupancy 2 

people)

120-150 AMI

Source: Section 415 of Planning Code.xv

Notes: 

* This increases by 0.5% each year until it reaches 15% (and started increasing in January 2018 from an initial base of 12%).

** The percentage of the two higher AMI tiers (moderate and middle income) will increase 0.25 percent for each category every year 

starting in 2020 until the overall total is 26 percent.

San Francisco’s BMR program is one of the most robust in the country with 238 BMR condominium units slated to come online in 

2019 (with one building alone contributing over 150 units). There are another 426 in the pipeline for the following 4 years.xvi

Even with this substantial new inventory, there is more demand for affordable units than supply. First-time homebuyers with 

eligible incomes apply to enter a lottery for each BMR unit through the city’s Database of Affordable Housing Listings Information 

and Applications (DAHLIA). In order to be eligible for the lottery, a household must complete a short application in which they list 

their income, attend a homebuyer education course with a HUD approved housing counseling agency, and get a pre-approval 

letter from a lender certifying they can qualify for a mortgage for the necessary amount for the unit.xvii This online system only 

went live in early 2019; prior to that, according to SFMOHCD staff, applicants were required to submit financial documents 

demonstrating their income and assets to be eligible for the lottery as well as unit specific loan pre-approvals for each unit they 

applied for. Advocates believe the new online system will improve access to the lotteries, particularly because much of the 

application could be completed using a smartphone. The lottery application timeframe is 45 days. If chosen by the lottery, 

residents are contacted by the developer’s realtor and if they are interested in the unit, begin to work with SFMOHCD and submit 

detailed financial records to verify that they meet the program requirements for the unit such as income, first time homebuyer 

status and debt-to-income ratios. 
© 2020 Fannie Mae 3.26.20 Page 5 of 18

SFMOHCD also establishes a number of other safeguards and steps in the purchasing process to ensure that borrowers are both 

eligible to benefit from the BMR unit and that they can successfully meet the mortgage payments over time:

 Approved Lenders: Borrowers can only secure a loan from an SF-MOHCD approved lender and must obtain a 30-year 

fixed interest rate mortgage. Lenders are precluded from charging fees beyond what they charge on conventional loans 

outside of the BMR program. These provisions protect borrowers from high fees or the risks associated with nontraditional mortgage terms, but can also reduce the profitability of these loans.

 Program Compliance: Buyers must sign an affidavit certifying that they meet program eligibility requirements and will 

remain in compliance, including that they will adhere to the resale restrictions if they choose to sell the property. 

 Refinancing Restrictions: To ensure that loan-to-value (LTV) ratios do not get too high, buyers are restricted from 

refinancing their mortgage or taking out additional liens against the property without SF-MOHCD approval. 

o SF-MOHCD will approve rate and/or term refinances, and in fact, a majority of BMR households refinance their 

mortgage. On average, households refinance 5.4 years after their initial purchase. Home Equity Lines of Credit 

(HELOC) are prohibited. 

 Ongoing Counseling: Buyers must complete a six-hour post-purchase homeownership course as well as an annual 

compliance certification that ensures the homeowner has active insurance and is meeting the minimum 10-month a year 

occupancy requirement.xviii

If the homeowner violates these provisions, the cost difference between the BMR sales price and the market value of the unit 

becomes due immediately from the buyer to SF-MOHCD.xix Violation of these provisions also allows the city to retake the 

property. By attaching these clear consequences to the deed and title for the property, the program has had significant success in 

ensuring compliance, according to program staff. However, one ongoing challenge is that the BMR program loans are not 

particularly profitable for banks and may even constitute a loss since lenders cannot charge fees high enough to offset the time 

and effort it takes to make the loans. 

The resale formula for the program has been established to balance the goals of equity accumulation for the homeowner and the

long-term preservation of affordability. The maximum resale price of the property is based on the initial purchase plus a 

percentage increase based on the change in the HUD listed AMI since the property was bought. The homeowner may also include 

the cost of approved capital improvements up to 10% of the resale price, the cost of a realtor up to 5% of resale, and the cost of 

any special assessments at a depreciation rate of 7% per year, which are one-time fees levied by homeowners’ associations for 

building wide costs. 

For example, a prototypical household of three with an income of about $48,000 (60% of AMI) purchases a 2-bedroom 

condominium in 2007 in a newly constructed building for $238,500 through the BMR program. A similar market rate unit in the 

building would have cost $846,000. The household then sells the unit in 2017 for $311,500, making a gain of $73,000 before selling 

costs. This gain represents a 30.6% appreciation on the initial price, which tracks closely with the 33.3% increase in AMI that 

occurred in San Francisco over that time period.xx The sale price in 2017 was still well below market rate, since a similar market 

rate unit in the building sold for $1,235,000 that year. This example illustrates how the BMR program allows low-and-moderate 

income homeowners to generate returns on their housing investment, as well as accrue the forced savings from mortgage instead 

of rent payments. In addition, the unit can subsequently be sold at a below market rate to a new lower-income homebuyer.

All resales must go through SF-MOHCD’s marketing and lottery process, similar to new units. About 30-50 BMR units are resold 

every year now, representing a small fraction of the overall number of units in the program. Previously it was a smaller portion of 

units but as the size of the program’s portfolio has grown, so has the number of resales. 

Lender Participation and Perspectives

One important element to the BMR program is partnering with lenders who are willing to work with city staff to originate these 

mortgages. The program has historically generated between 50-60 mortgage originations each year, from a combination of new 

properties (the majority of originations), refinances, and resales. Though in some years, like the current one, there is a 

significantly greater number of units entering the program due to large condominium projects opening. While SF-MOHCD has 

approved 35 mortgage loan originators at 20 financial organizations to lend in the program, only 4 banks (First Republic, 

Umpqua, Citibank, and Wells Fargo) have originated 67 percent of all loans in the program, based on data going back to 2008.xxi

Of this portion of units in the program, First Republic has made 26.3 percent of all loans in the program while the majority of 
© 2020 Fannie Mae 3.26.20 Page 6 of 18

lenders have made 5 or fewer loans. These loans are sold to both Fannie Mae and Freddie Mac. Demand for lenders in the 

program comes in waves and can intensify significantly when a new large project opens; program staff indicate the need for 

additional lenders.

Lenders that actively participate in the program cited a number of reasons why they offer mortgages as part of the BMR program, 

despite the higher levels of paperwork and lower mortgage balances. The overarching reason was the desire to serve lower 

income residents in the city and to be “good citizens.” For these banks, particularly the regional and community banks, 

participating in the program is seen as an important part of value alignment, serving the needs of their community.

Interviews also pointed to the potential for new business as a result of these mortgage originations. xxii One west coast based 

community bank, for example, decided to join the San Francisco program because they saw participation as an opportunity to be 

seen as a “full service bank” compared to their competitors in the market. Similarly, an independent mortgage company said they 

participated as part of their long-term marketing strategy to bring in first-time homebuyers as customers. They believe these 

customers will become long-term clients, as well as generate additional business through referrals. 

A third reason banks gave for participation is to satisfy their obligations under the Community Reinvestment Act (CRA), which 

requires that insured depositories meet the credit needs of their communities, including low- and moderate-income 

households.xxiii However, few interviews noted the CRA as the primary motivation for participating – in general, CRA credit was 

seen as an added benefit to lender involvement rather than the reason for that involvement. For example, mortgage loan 

originators at two banks noted that a duty to assist low-income households in achieving homeownership was a key goal as well as 

getting CRA credit. One of those mortgage loan originators, who was part of the community development department of the 

bank, noted that their portfolio loan product for the BMR program, which is below the rates typically offered for conventional GSE 

loans, helps them to meet their CRA goals as their bank grows, and in turn their CRA obligations. This lower rate has helped the 

bank to make the most loans of any bank in the BMR program, currently around 30% of all loans made each year in the program 

according to MOHCD staff and affordable homeownership advocates, which is greater than their overall historical share of the 

loans across the history of the program. 

Finally, lenders also come to the BMR program through other programs and relationships. For example, lenders who participate 

in the down payment assistance loan program (DALP) also often do primary mortgages for the BMR program. This has helped 

bring in some additional lenders according to staff at MOHCD. In addition, developers often use a primary lender and have them 

serve as the lender for the BMR units too.

The Impact of San Francisco’s BMR Program

By all accounts, San Francisco’s BMR program has been successful, helping lower-income San Franciscans access 

homeownership in a city where the average house price is well over $1 million. 

Analyzing data from a sample of current program participants shows the broad range of households served by the program.xxiv

(Table 3) About a third of households earn less than 80 percent of AMI – in 2018 that equated to a maximum income of $66,300 for 

a 1-person household.xxv The majority of buyers have incomes between 80 and 120 percent of AMI, higher than most affordable 

housing programs that generally limit benefits to those earning less than 80 percent of AMI. However, the high housing costs in 

San Francisco, even with inclusionary subsidies, make it difficult to extend the subsidy to those who earn substantially less.

The program also primarily serves smaller households, with just over 70 percent having only 1 or 2 members. This may be in part 

explained by the housing supply available through the program: the majority of units tend to be 1- and 2-bedroom condos along 

with some studios. Fewer than 15 percent of the units are 3-bedrooms or more. The age of the head of household ranges from 19 

to 78 with a median age of 35. Even though household sizes are small, 60 percent of households had one or more minors and 24 

percent of households was home to a senior. There are no modifications to the terms of the loan or house value when household 

size or income changes. However, if a household decides to refinance and their income has increased, SF-MOHCD can ask them to 

repay their initial down payment assistance. SF-MOHCD requires this repayment if the overall mortgage payment – with the new 

principal that includes repaying the down payment assistance – would be below 28 percent of the household’s income. 

Data on participants’ race and ethnicity show that the majority of buyers are Asian, followed by non-Hispanic Whites. While these 

are the two dominant racial and ethnic groups in San Francisco, Black and Latino households are under-represented in the 

program in comparison to their share of the city population. Gender is balanced evenly for heads of household. 
© 2020 Fannie Mae 3.26.20 Page 7 of 18

Table 3: Demographic Profile of SF’s BMR Program Participants

Households by AMI at Purchase Percent

50% and Below 1.6

50-80% 31.4

80-100% 59.4

100-120% 7.3

Over 120% 0.3

Households by Race/Ethnicity

Asian 55.2

White 26.7

Latino 7.7

Multi-Racial 2.1

Black 1.9

Not Stated 6.4

Household Size

1 48.1

2 22.3

3 17.3

4 or more 12.3

To assess the benefits of the BMR program on housing stability and wealth accumulation, we matched the addresses of the city’s 

public data on BMR units to tax assessor data for 1,165 BMR units (88% of the units in the program). This allowed us to assess 

both the length of time homeowners lived in their unit, as well as the price of the unit at purchase and at sale, as well as compare 

outcomes with homeowners of comparable market rate units.

Overall 60.6 percent of households in BMR units are the original homebuyers although this includes households who have moved 

in recently. Approximately 92.1 percent of households in BMR units built in the past ten years (after 2009) are the original tenants, 

in comparison to 41.6 percent of households in BMR units built more than a decade ago. . Among BMR owners who sell their 

home, the median number of years before sale is 7. (Figure 4) Although this is fewer years than the typical homeowner, it is longer 

than other low-income households.xxvi
© 2020 Fannie Mae 3.26.20 Page 8 of 18

Table 4: Length of Tenure in BMR Units

Percentage of Households who Have Not Moved 60.6%

Percentage of Households who Have Not Moved – Moved in Prior to 2009 41.6%

Percentage of Households who Have Not Moved – Moved in Since 2009 92.1%

Median Number of Years Before Resale, for Households Who Sell 7 years

For those who sold, the majority of households gained equity. (Figure 5) The majority (90 percent) of BMR homeowners who sold 

their home made a gain at resale compared to their original purchase price. The average seller sold their home for 25 percent

more than their initial purchase price (not adjusted for inflation) and this percentage increases steadily with increased years of 

tenure. This translates into an average net capital gain (sale amount less initial cost) of $61,000. However, this does not account 

for selling costs from the realtor fee (5% for BMR units in the program) and the transfer tax, which generally amounts to 6-7 

percent of sale prices in San Francisco.xxvii

That said, buyers of market rate condominiums in San Francisco gained more: the average resale gain at the last sale was 

$612,000. Market rate sales had an overall average appreciation rate (unadjusted) of 54.1 percent. Holding the number of years of 

ownership and the age of the unit constant, the appreciation (equity) gained at resale by BMR owners was about 24 percent less 

than comparable market rate owners. (Appendix Table B.1) However, as Figure 5 shows, market rate owners were slightly more 

likely to sell their home at a loss.

Figure 2: Distribution of Equity Losses and Gains, SF BMR Participants

These finding are not surprising, given that the structure of the program passes on the subsidy to the next borrower. Our analysis 

shows that BMR units were initially sold at a discount of 67.1 percent and that this discount grew slightly to 67.8 percent at resale. 

This translates into a discount of $540,750 at initial sale (examples were from 2003-2007) and $640,000 at resale (2012-2018), 

passing on the affordability of the unit to the next owner. These differences illustrate the tradeoffs of a BMR program from an 

asset building perspective: while BMR borrowers are still able to build equity, the preservation of the affordability subsidy means 

that the home remains in the city’s housing stock and can be resold at an affordable price to other households.

The analysis also suggests one added benefit to BMR units: because of their lower market valuation and high demand for 

affordable units, borrowers may be protected from market downturns, at least in stronger real estate markets. We examined 9 

0

10

20

30

40

50

60

70

80

More than 5% Loss in

Value

Broke even (+/- 5%

change in value)

Between 5% and

40%

Share of Households That Sold Their 

Greater than 40%

Home

Market Rate BMR
© 2020 Fannie Mae 3.26.20 Page 9 of 18

pairs of units in which one unit was a BMR and the other market rate, but where both were in the same building with the same 

number of bedrooms and that were bought/sold in the same years. The market rate units saw higher returns both percentagewise 

and in terms of actual resale profits compared to the BMR units ($300,000 to $600,000 more). However, market rate units sold 

during 2012 and 2013—before the market recovered—saw losses or less appreciation in comparison to the BMR units. 

Default rates in the program are also low. While data on earlier years are not available from SF-MOHCD, in 2017 and 2018 there 

were only 4 defaults and 1 trustee sale out of the more than 1,300 properties in the program. This represents a 0.07 percent 

default rate, significantly lower than most programs targeted at lower-income borrowers. 

Lessons Learned: Challenges to Running a BMR Homeownership Program

San Francisco’s BMR program has evolved over time, responding to changes in the housing market, the lending environment, and 

programmatic guidelines and priorities established by city leadership. 

Lesson 1: Simplify the Intake Process

As a government program, SF-MOHCD has an obligation to ensure that the benefits of the subsidy go to qualified families, and 

that the program adheres to city priorities and rules. However, this obligation comes with extensive oversight and paperwork,

which can pose a barrier to households applying for the program. Prior to October 2018, households needed to provide detailed 

financial information in order to qualify before they even entered the lottery, as well as obtain a separate loan pre-approval for 

each unit they applied for. This level of paperwork put a strain on both households and lenders, without any guarantee that they 

would be selected in the lottery and considered for a unit.

In recent years, SF-MOHCD has streamlined the application process by creating the DAHLIA online application system. Applicants 

now only apply once with a single loan pre-approval to enter the lottery for all the BMR units in each building. Lenders reported 

that DAHLIA has improved access and the online portal has helped with timely processing for both lenders and SF-MOHCD. 

Prospective buyers still need to complete an approved homebuyer education class prior to applying for the lottery. Program staff 

note that this is important to ensure that borrowers are prepared to buy a home, and that they are committed to engaging in the 

process if they are selected. Program staff also noted that their current program rules are structured to help quickly identify a 

qualified program buyer so that waiting to find a buyer does not create a financial burden to developers or sellers. MOHCD staff 

noted that on average it takes 1-2 months for households to complete the homebuyer education and loan pre-approval. 

However, lenders suggested that the program could be improved if SF-MOHCD didn’t require the homeowner education or loan 

pre-approval until after the lottery was conducted. Lenders believed this would attract a more diverse pool of program 

applicants, as well as reduce the amount of time that lenders have to spend issuing pre-approvals for applicants who are often 

not chosen in the lottery. Respondents noted that the City of Oakland and Alameda County structure their programs in this way, 

to minimize up front workload. 

Another challenge for borrowers can be navigating SF-MOHCD’s income guidelines. In order to target lower-income families, the 

guidelines include a wide variety of categories of income, such as overtime pay. However, households sometimes believe they 

would qualify, but find out later that they are over the income limits. According to SF-MOHCD program staff, borrowers will often 

not factor in overtime or assets, both of which MOHCD does count. One lender also noted that many borrowers think SF-MOHCD 

will make an exception for them if they are just a little over the income limit, but this is not true. While it could be possible to 

create an online calculator to help borrowers assess their eligibility, in reality, this step in the process requires staff to look at 

income paperwork carefully since being an effective steward of city resources is critical to the program’s long term political 

support and success.

Lesson 2: A Few, Active Lenders May Be More Effective than Multiple Lenders 

A second challenge facing the program is encouraging more lenders to actively participate in originating mortgages. As noted 

above, the need for mortgage loan originators to support the program spikes and wanes – when a new building comes on the 

market, there can be as many as 150 new BMR units that need to be processed in a short time frame. While there are 35 mortgage 

loan originators on MOHCD’s approved lenders list, this is not enough to meet the needs of borrowers when there is a rush, 

especially when many of these mortgage loan originators only originate 1-2 loans a year. Only a handful of mortgage loan 

originators are active participants in the program. This situation results in mortgage loan originators not being able to respond 
© 2020 Fannie Mae 3.26.20 Page 10 of 18

regularly. Advocates noted that some participants can get frustrated when they only receive a lending officer’s voicemail, and/or 

when they have to wait a long time to receive a reply 

Interviews illustrated some of the challenges to getting more mortgage loan originators to participate. For most mortgage loan 

originators, lack of predictability in being able to translate the time it takes to work with a customer into a loan origination 

outweighs the potential benefits of being an active lender in the program. Lenders reported that borrowers seeking to join the 

lottery mostly contacted with them through BCC emails, presumably sent to multiple lenders at once. Answering those emails can 

take time, particularly in terms of working towards giving the borrower a pre-approval, and the lack of a personal relationship 

means it isn’t clear whether the borrower is doing this with ten lenders or just a couple.

In addition, mortgage loan originators reported feeling frustrated that borrowers were concerned solely with the cost of the loan 

(e.g. the interest rate) and not about customer service or their experience with the individual mortgage loan originator. Mortgage 

loan originators who primarily made market rate loans said that the low interest rate offered by some other lenders who offered a 

portfolio product made it hard for them to compete in this market. Compared to market rate loans where most buyers will 

eventually take out a mortgage with the pre-approval lender, in this case, the mortgage loan originator can do a lot of work and 

the borrower may not even be selected in the lottery. Advocates noted that these challenges often lead to some mortgage loan 

originators choosing to leave the program, even though their bank may rotate in other staff to cover the program requests. 

On the flip side, SF’s BMR program has a few committed lenders who originate the majority of loans, and who did not cite these 

same concerns. Most of these lenders come from the community development side of the bank and see cultivating their 

relationships both with SF-MOHCD and with prospective borrowers as a vital part of their job. These mortgage loan originators 

did not mention any difficulties in getting buyers to individually reach out to them, though they attributed this in part to word of 

mouth and their reputation for having been in the program for a number of years. 

The interviews reveal that generating sufficient lender participation is not solely an issue of the number of approved mortgage 

loan originators. More saliently, the challenge is having enough engaged mortgage loan originators who are familiar with and 

well-integrated into the program. Mortgage loan originators who are not regularly involved with the program seem more likely to 

choose to stop lending in the program or encounter obstacles. Increased engagement of existing approved mortgage loan 

originators and collaboration between housing counseling agencies, SF-MOHCD staff, and lenders could help to further address 

existing issues. In addition, the city could work with their local Federal Reserve community development office to educate banks 

about their BMR program and its link to CRA. While CRA may not be a motivator for larger financial institutions (who can meet 

their CRA obligations more effectively in other ways), smaller and community banks may see this as an opportunity to grow their 

business and receive CRA credit. 

Another approach is to lower the barriers to participation. To help recruit more lenders into the program, SF-MOHCD is working 

to simplify the approval process by allowing mortgage loan originators to take the required training online, as opposed to in

person. SF-MOHCD staff believes this will allow more mortgage loan originators to complete the training as well as provide a 

useful resource when mortgage loan originators have questions about the program. SF-MOHCD plans on having the online 

training available in early 2020. 

Lesson #3: Streamline Internal Processes

In addition to streamlining the application process for borrowers, the program has learned that it also needs to improve the flow 

of documents between program staff and lenders. Around 5 years ago, SF-MOHCD helped streamline communication with lenders 

by having banks submit their documentation through an online Salesforce based platform, which improved turn around time and 

document tracking. 

SF-MOHCD has also held focus groups with lenders to better understand how they could improve the application process. One 

identified challenge is that SF-MOHCD does not have an underwriting platform that outside lenders can review, such as an 

origination system or Desktop Underwriter. Instead, SF-MOHCD individually reviews each application and accounts for the 

specific conditions of the borrower’s profile, instead of relying on a computer-generated assessment. This individual review of 

each file is time consuming and slows down the overall process for lenders, according to advocates. SF-MOHCD hopes to 

eventually add a way for lenders to see the status of an individual application during the approval process, as well as to develop a 

program-specific automatic underwriting system. However, staff also note that the program rules, and often borrower’s financial 

profiles, require different types of evaluation mechanisms than most existing automated systems can provide.
© 2020 Fannie Mae 3.26.20 Page 11 of 18

Interviews with mortgage loan originators identified other potential areas for improvement. One challenge was a perceived lack 

of recourse to address decisions made by SF-MOHCD staff as well as the length of time it can take to get to escrow. Lenders also 

expressed interest in better understanding the exact underwriting guidelines that MOHCD is using, since the process is still 

somewhat opaque.

Perhaps the biggest tension between lenders and SF-MOHCD is the different lens they bring to the qualification process. For SFMOHCD, their primary goal in reviewing a borrower’s finances is to ensure that the borrower falls below the AMI threshold to 

qualify for the program. As a result, SF-MOHCD reviews and counts assets as income, and also sets maximum income limits and 

counts many different types of income (for example, MOHCD will include overtime income in assessing a borrower’s 

qualifications). In contrast, the lender’s concern is whether the borrower has sufficient income to meet the mortgage payments –

additional income or assets are generally not used to calculate the household’s debt to income (DTI) ratio. In other words, for the 

lender, the concern is a minimum income threshold, rather than a maximum. Until recently, SF-MOHCD required that lenders 

check that applicants meet the program’s eligibility requirements, which was an added step for the lender and didn’t align with 

their systems. However, SF-MOHCD is working to change this. 

Overall, however, lenders we interviewed noted that the clear and detailed rules and regulations set the SF-MOHCD program 

apart as a gold standard for inclusionary housing BMR sale programs. Lenders highlighted that the San Francisco program 

provided useful sample documents, and that an online application system was an important innovation. They also noted that SFMOHCD staff had compiled an extremely detailed program manual. This manual means that lenders can safely make decisions 

based on documented policy, rather than worrying that they are at risk of a subjective judgment being made later on in the 

process. 

Lesson # 4: Provide Ongoing Support for Borrowers

One of the strengths of the SF-MOHCD BMR program is that it provides a variety of supports for homeowners that help to make 

the program sustainable and effective. The concept of “stewardship” is central to the staff’s mission, and they seek to ensure that 

residents benefit and that the program maintains the long-term affordability of the units.

One way the program supports borrowers is through pre-purchase and post-purchase counseling. SF-MOHCD coordinates these 

services with HUD certified counseling agencies. Mortgage loan originators noted that the housing counseling agencies are well 

organized under a single coordinating umbrella, which makes it easy for prospective program participants to attend housing 

counseling sessions. SF-MOHCD also offers ongoing support by conducting annual compliance check-ins with households in the 

program and supporting them if they run into challenges. 

SF-MOHCD has also worked to ensure that borrowers with different financial histories do not face barriers in finding a lender. 

They actively try to recruit lenders with different underwriting requirements, such as accepting borrowers with lower credit 

scores or past bankruptcies, to participate in the program. Staff also connect borrowers with other programs such as the Federal 

Home Loan Bank’s Workforce Initiative Subsidy for Homeownership (WISH) program, which provides grants to qualified first-time 

homebuyers to help with down payment and closing costs. These aspects of the SF-MOHCD BMR program, as well as annual 

check-ins from SF-MOHCD staff, help to support borrowers in the program and helps to ensure that they are able to sustain 

homeownership. 

One emergent challenge, particularly as house prices in the city have risen, is the concomitant increase in Home Owners 

Association (HOA) dues. HOA dues can put financial pressure on a household because HOA dues are calculated based on the 

market value of the unit, even when it is subsidized. Advocates who have worked with BMR owners cited that HOA dues have gone

up much higher than is accounted for in assessing the affordability of the unit for a buyer. Currently, SF-MOHCD’s pricing 

calculations only account for the increase in HOA dues through an initial 10% initial pricing cushion (units are priced as affordable 

for 90 AMI if a household is actually at 100 AMI). However, in some buildings HOA dues might go up by 5% in just a year or two. 

One lender explained that the rising cost of HOA dues makes BMR units unaffordable for many households unless they are able to 

make a significant down payment, often through gifts from family members. MOHCD is working to collect data on HOA dues to 

assess how they influence program participant budgets. A challenge for the program is deciding whether this means that the AMI 

bands should be raised to allow higher income households to participate in the BMR program (to ensure affordability) or whether 

to provide more subsidy so that lower-income families can still qualify while still accounting for rising HOA dues.
© 2020 Fannie Mae 3.26.20 Page 12 of 18

Lesson #5: Extending the Reach of Government Sponsored Enterprises (GSEs)

Bank partnerships with GSEs, and the ability to sell their BMR loans to them for securitization, could increase the capital available 

to the program as well as encourage more active lender participation. Until recently, the GSEs have had limited participation in 

shared equity programs, in part due to the fact that these programs often have requirements that MOHCD and lenders perceive to 

conflict with GSE selling guidelines. For example, MOHCD staff and lenders both cited that, in the MOHCD BMR program, resale 

restrictions survive foreclosure, which they believed did not fit within the general GSE selling guidelines.xxviii However, in reality 

the survival of those restrictions are within the general selling guidelines and the actual aspect of the program that requires the 

variances is because of the potential for a loan to exceed the Combined Loan to Value limitation due to the subsidy provided via 

the BMR program.xxix In addition, various lenders noted that a couple of the active lenders in the program offer a portfolio 

product, which means they are able to offer a lower interest rate than is typically available for conventional GSE loan products.

The Duty to Serve guidelines, however, have led to increased interest in participating in these type of programs at the GSEs. Duty 

to Serve is a federal rule issued by the Federal Housing Finance Authority (FHFA) that required the GSEs to focus on lending to 

various underserved markets, including shared equity homeownership programs like the SF-MOHCD BMR condominium 

program.xxx GSEs were required to submit an initial plan for meeting their Duty to Serve obligations and then are evaluated 

annually on their success in meeting the goals in these plans. 

SF-MOHCD staff noted that they are interested in receiving more active outreach from GSEs, including regular contact with a 

dedicated account manager, in order to have a stronger ongoing relationship. The lesson learned is that communications 

between city program staff, GSE staff, and lenders are critical to helping to create a robust secondary market for these loans. 

There has already been some success in improved communications between MOHCD and the GSEs. One lender whose bank 

currently portfolios all of their SF-MOHCD BMR loans is now looking into selling them to a GSE. The lender stated that she brought 

this idea to her bank after SF-MOHCD staff explained at a recent training that variances were available from the GSEs. SF-MOHCD 

also then provided a template variance request letter. The mortgage loan originator believed that selling the loans to a GSE could 

make them more flexible as a lender since some borrowers may qualify under GSE selling guidelines but not their portfolio 

lending guidelines. This interaction illustrates how more communication between the GSEs and MOHCD can eventually increase 

the number of deed-restricted shared equity mortgages sold to the GSEs. 

Lesson #6: Prioritizing Low-Income Homeownership

In addition to the programmatic lessons detailed above, one of the key lessons from San Francisco’s BMR program is that in highcost markets, cities will intentionally have to support access to homeownership for lower-income families. San Francisco 

dedicates a significant portion of its budget to housing issues, and also exacts a very high inclusionary rate on new developments. 

Without this capital and political will, it will be increasingly difficult to close the gap between what low-income families can afford 

and the prices of even entry-level homes.

San Francisco faces another challenge as well: as the area median income is rising, unit prices at a level of affordability relative to 

AMI is continuing to increase as well. In 2017, the AMI for San Francisco was over $120,000, meaning that even at 80 percent of 

AMI, buyers of BMR units would need an income of around $96,000. Indeed, the program’s BMR unit costs grew by $100,000-

$300,000 from 2015 to 2019 depending on size. The median price change for BMR units during that time period was $144,500. 

Individuals familiar with the housing counseling agencies explained that these high costs mean that some low-income 

households would be forced to look elsewhere in the Bay Area. This issue of some buyers choosing to go elsewhere to avoid the

resale restrictions was also brought up by a lender in the program. 

More is likely needed if the goal is to continue to support homeownership for low- and middle income households. Currently, the 

program can be combined with SF MOHCD’s Down payment Assistance Loan Program (DALP) and the Workforce Initiative Subsidy 

for Homeownership (WISH) Program, which can help close the subsidy gap for some households. However, borrowers currently 

cannot access California’s Housing Finance Agency’s down payment assistance program due to requirements about second lien 

position conflicting with the structure of the BMR deed restrictions. Aligning these programs could help.
© 2020 Fannie Mae 3.26.20 Page 13 of 18

Conclusion

San Francisco’s BMR homeownership program is exemplary in a variety of ways. A strength of the program is the welldocumented regulations and its ability to stick to those guidelines, which offer lenders, developers, and buyers a clear 

understanding of the rules of the program. The use of the promissory note attached to the deed itself has also worked well to

ensure adherence to resale restrictions. SF-MOHCD staff also noted that they believe their homebuyer education, both pre- and 

post-purchase, is important to the success of the program. These best practices could be replicated in more cities. 

One way to scale SF-MOHCD’s best practices could be to create a set of standardized documents for deed restricted shared equity 

programs. Establishing model documents and a library of “approved” programs.xxxi This way the GSEs could pre-approve the 

relevant legal documents. These documents could be shared with local governments to help boost awareness of the program and 

increase adoption of these standards. This could help to increase lending for shared equity programs across the country. Were

these standards to come from FHFA it could have even broader effects by leveraging lenders that currently sell shared equity 

loans to the GSEs. 

Representatives from the GSEs explained that having standardized documents across all inclusionary housing programs would 

then bring in more lenders, including larger banks, since they would only need to understand one blanket version of deed 

restricted shared equity instead of learning the intricacies of each different city’s program. Researchers specializing in shared 

equity noted that inclusionary housing programs are well suited to be standardized at the state or national level because they are 

simpler and less specific to local contexts than other housing programs. This would create a larger standardized market for deed 

restricted shared equity mortgages instead of these small volume of loans from each individual program. This would cut down on 

the amount of training time and other costs banks would have to expend to do loans in the program. The model program 

documents could also standardize the data points requested of each borrower so that they match the data needed for the Fannie 

Mae automated underwriting system, which would further minimize the burden of lending in deed restricted shared equity 

programs.xxxii

xxxiii

Leaders at one bank noted that it would not be enough for individual programs to be “certified” for compliance if 

that meant there was still no over-arching uniformity across programs. Too broad of a certification program would still make 

banks customize their systems and potentially negotiate participation on a program-by-program basis, which would not help to 

bring in more lenders to deed restricted shared equity programs.

Overall, the MOHCD BMR Homeownership program offers a valuable template for how other deed restricted shared equity 

programs, particularly inclusionary housing, can be structured to effectively maintain affordable housing and generate wealth for 

low and moderate income households. If this model is successfully standardized across municipalities in California it would likely 

bring in more lenders, including large financial institutions, to the deed restricted shared equity market and in turn increase the 

volume of these loans in the secondary mortgage market. Standardization could be especially effective if paired with reform of 

the Community Reinvestment Act that pushed more lenders to make loans to low-income households. Fannie Mae, FHFA and 

other GSEs are well positioned to coordinate broader standardization of these programs with state agencies, local governments

and policymakers in order to improve lending in these programs. 
© 2020 Fannie Mae 3.26.20 Page 14 of 18

References

Brinklow, A. (2019, June 5). Housing crisis: SF home prices up again for spring despite lag. Retrieved August 13, 2019, from Curbed SF 

website: https://sf.curbed.com/2019/6/5/18654356/compass-san-francisco-housing-price-report-median-spring-2019-rises

United States Census Bureau. (2017). United States Mover Rate at a New Record Low. Retrieved September 4, 2019, from The United 

States Census Bureau website: https://www.census.gov/newsroom/blogs/random-samplings/2017/01/mover-rate.html

United States Census Bureau. (2018). American FactFinder—Total Population in Occupied Housing Units by Tenure by Year Householder 

Moved Into Unit for San Francisco, 2017 American Community Survey 1-Year Estimates. Retrieved August 8, 2019, from 

https://factfinder.census.gov/bkmk/table/1.0/en/ACS/17_1YR/B25026

City and County of San Francisco. (2016, June 12). San Francsico Planning Code: Section 415 Inclusionary Affordable Housing Program. 

Retrieved from 

http://library.amlegal.com/nxt/gateway.dll/California/planning/article4developmentimpactfeesandprojectr?f=templates$fn=default.ht

m$3.0$vid=amlegal:sanfrancisco_ca$anc=JD_415

City and County of San Francisco Mayor’s Office of Housing and Community Development. (2018, August 22). Inclusionary Affordable 

Housing Program Monitoring and Procedures Manual. Retrieved from 

https://sfmohcd.org/sites/default/files/Documents/MOH/Inclusionary%20Manuals/Inclusionary%20Affordable%20Housing%20Program

%20Manual%20-%202018%20Draft.pdf

City and County of San Francisco Mayor’s Office of Housing and Community Development. (2019a, May 23). Affordable Housing Pipeline | 

DataSF | City and County of San Francisco. Retrieved August 13, 2019, from https://data.sfgov.org/Housing-and-Buildings/AffordableHousing-Pipeline/aaxw-2cb8

City and County of San Francisco Mayor’s Office of Housing and Community Development. (2019b, June 10). MOHCD Sample BMR Closing 

Documents. Retrieved from 

https://sfmohcd.org/sites/default/files/Documents/MOH/BMR%20Ownership/SAMPLE%20Inclusionary%20BMR%20Closing%20Docume

nts.pdf

Fannie Mae. (2009, April 1). B5-5.2-04: Loans with Resale Restrictions: Legal Considerations (04/01/2009). Retrieved September 5, 2019, 

from https://www.fanniemae.com/content/guide/selling/b5/5.2/04.html

Fannie Mae. (2018). Shared Equity Portfolio Analysis January 2014 -November 2018.

Federal Housing Finance Agency. (2016, December 13). FHFA Issues Final Rule on Fannie Mae and Freddie Mac Duty to Serve 

Underserved Markets | Federal Housing Finance Agency. Retrieved September 6, 2019, from 

https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Issues-Final-Rule-on-Fannie-Mae-and-Freddie-Mac-Duty-to-Serve-UnderservedMarkets.aspx

Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

NerdWallet. (n.d.). Mortgage Calculator with PMI and Taxes | NerdWallet. Retrieved August 13, 2019, from 

https://www.nerdwallet.com/mortgages/mortgage-calculator

Phinney, R. (2013). Exploring Residential Mobility among Low-Income Families. Social Service Review, 87(4), 780–815. 

https://doi.org/10.1086/673963

San Francisco Mayor’s Office of Housing and Community Development. (2019, February 13). Residential Projects With Inclusionary 

Requirements. Retrieved from https://data.sfgov.org/Housing-and-Buildings/Residential-Projects-With-Inclusionary-Requirement/nj3xrw36

The Urban Institute, Temkin, K., Theodos, B., & Price, D. (2010). Shared Equity Homeownership Evaluation: Case Study of the San Francisco 

Citywide Inclusionary Affordable Housing Program. Urban Institute.

Theodos, B., Pitingolo, R., Latham, S., Stacy, C. P., Daniels, R., & Braga, B. (2017). Affordable Homeownership: An Evaluation of Shared 

Equity Programs. Retrieved from https://www.urban.org/sites/default/files/publication/88876/affordable_homeownership_0.pdf

Theodos, B., Stacy, C. P., Braga, B., & Daniels, R. (2019). Affordable Homeownership: An Evaluation of the Near-Term Effects of Shared 

Equity Programs. Housing Policy Debate, 0(0), 1–15. https://doi.org/10.1080/10511482.2019.1596965

United States Department of Housing and Urban Development (HUD) Office of Policy Development and Research (PD&R). (n.d.). Income 

Limits | HUD USER. Retrieved August 13, 2019, from https://www.huduser.gov/portal/datasets/il.html#2017
© 2020 Fannie Mae 3.26.20 Page 15 of 18

Appendix A: Methodology

This research was conducted using a mixed methods approach based on data analysis of census, tax assessor and internal data 

from MOHCD as well as interviews and analysis of program documents. As part of this research a broad selection of individuals

involved in these types of programs were interviewed including officials at GSEs, mortgage loan originators working with the 

program from depository institutions and independent mortgage lenders, experts on shared equity homeownership programs, 

homeownership advocates, and staff at MOHCD. The research used tax parcel data from the Land Vision database to supplement 

internal data supplied by MOHCD in order to effectively analyze length of tenure, sale prices and appreciation of properties in the 

program. That research was supplemented by earlier reports on the program as well as careful review of MOHCD’s program 

documents and relevant sections of the San Francisco City Planning Code. 

We would like to thank the following individuals who took the time to provide their expertise for this research: Nelson Wong at 

Umpqua Bank, Sean Crowley at Union Bank, Brett Theodos at the Urban Institute, Sandra Smith at Guild Mortgage, Shannon Way 

at Homeownership SF, as well Cissy Yin, Jackie Tsou and Maria Benjamin at the San Francisco Mayor’s Office of Housing and 

Community Development. 
© 2020 Fannie Mae 3.26.20 Page 16 of 18

Appendix B: Regression Table

Table B.1: Rate of Appreciation Controlling for Years Owned and Age of Unit

(1) (2) (3)

Model 1 Model 2 Model 3

Number of Years Owned 5.401*** 5.410*** 5.510***

(80.28) (80.55) (80.60)

Below Market Rate -32.89*** -23.55***

(-9.47) (-6.67)

Year Built -0.205***

(-24.01)

Constant 18.82*** 19.03*** 419.2***

(35.15) (35.57) (25.06)

Observations 24,458 24,458 22,417

R2 0.209 0.211 0.241

Adjusted R2 0.209 0.211 0.241

t statistics in parentheses

* p < 0.05, ** p < 0.01, *** p < 0.001
© 2020 Fannie Mae 3.26.20 Page 17 of 18

Endnotes

i Brinklow, A. (2019, June 5). Housing crisis: SF home prices up again for spring despite lag. Retrieved August 13, 2019, from Curbed SF website: 

https://sf.curbed.com/2019/6/5/18654356/compass-san-francisco-housing-price-report-median-spring-2019-rises

NerdWallet. (n.d.). Mortgage Calculator with PMI and Taxes | NerdWallet. Retrieved August 13, 2019, from 

https://www.nerdwallet.com/mortgages/mortgage-calculator

ii Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

iii A study by the Urban Institute (2010) found that nearly three-quarters of resold units required a minimum income that was, in real terms, no 

more than 10% larger than the initial sale, which illustrates the effectiveness of the resale formula at ensuring the long-term affordability of 

these units. In addition, they found that households who sold their BMR unit earned a median internal rate of return (IRR) of 11.3% on their 

initial investment of about $40,533, including both the homeowner’s down payment and closing costs. That median rate of return exceeded the 

returns that those resellers would have earned if they had rented a unit and invested their down payment in stocks (3.2% median return if BMR 

resellers invested their down payment amount in an S&P 500 index fund) or 10-year Treasury bonds (median yield of 4.4% at time of initial 

purchase). 

iv This research was conducted through a mixed methods approach using quantitative analysis as well as qualitative interviews with a variety of 

stakeholders. Interviews included mortgage loan originators at a variety of approved lenders for the MOHCD BMR program, advocates, staff at 

Fannie Mae and Freddie Mac, research experts in shared equity housing, and MOHCD staff. These interviews were supplemented by quantitative 

analysis of internal MOHCD data and tax assessor data from Land Vision. Relevant program documents were reviewed such as the program 

manual, governing section of the planning code, and loan closing documents as well as scholarly literature on deed restricted shared equity. 

v The Urban Institute, Temkin, K., Theodos, B., & Price, D. (2010). Shared Equity Homeownership Evaluation: Case Study of the San Francisco 

Citywide Inclusionary Affordable Housing Program. Urban Institute.

vi Often this amount is tied to the change in Area Median Income or the Consumer Price Index, which is often thought of as a proxy for inflation.

vii Theodos, B., Stacy, C. P., Braga, B., & Daniels, R. (2019). Affordable Homeownership: An Evaluation of the Near-Term Effects of Shared Equity 

Programs. Housing Policy Debate, 0(0), 1–15. 

viii Theodos, B., Stacy, C. P., Braga, B., & Daniels, R. (2019). Affordable Homeownership: An Evaluation of the Near-Term Effects of Shared Equity 

Programs. Housing Policy Debate, 0(0), 1–15.

ix Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

x The program also includes 1,200 rental units, but these are not discussed in this report.

xi The Condo Conversion Below Market Rate program created units between 1979 and 1988, when building owners who converted their 

properties from apartments to condominiums were required by the City to set aside some condominiums as below market rate (BMR) units. The 

Limited Equity Program is similar to the Inclusionary Housing condominium program but applies to legacy units generated by the San Francisco 

Redevelopment Agency, a now defunct department. 

xii The fee amount is based on $199.50 per square foot of a percentage of gross floor area of the project. The percentage of the overall building 

used to calculate the fee at that rate is 20% for a project of fewer than 25 units, 30% for larger rental projects, and 33% for larger ownership 

projects. 

City and County of San Francisco Mayor’s Office of Housing and Community Development. (2018, December 1). Inclusionary Housing Program 

Fee Schedule 2019. Retrieved from https://sfmohcd.org/inclusionary-housing-program-fee-schedule

xiii City and County of San Francisco Mayor’s Office of Housing and Community Development. (2019, February 13). Residential Projects With 

Inclusionary Requirements. Retrieved from https://data.sfgov.org/Housing-and-Buildings/Residential-Projects-With-InclusionaryRequirement/nj3x-rw36

xiv These are MOHCD’s income level guidelines which do not conform to the same terminology used by federal agencies and government 

sponsored entities (GSEs). 

xv City and County of San Francisco. (2016, June 12). San Francisco Planning Code: Section 415 Inclusionary Affordable Housing Program. 

Retrieved from 
© 2020 Fannie Mae 3.26.20 Page 18 of 18

http://library.amlegal.com/nxt/gateway.dll/California/planning/article4developmentimpactfeesandprojectr?f=templates$fn=default.htm$3.0$

vid=amlegal:sanfrancisco_ca$anc=JD_415

xvi City and County of San Francisco Mayor’s Office of Housing and Community Development. (2019, May 23). Affordable Housing Pipeline | 

DataSF | City and County of San Francisco. Retrieved August 13, 2019, from https://data.sfgov.org/Housing-and-Buildings/Affordable-HousingPipeline/aaxw-2cb8

xvii City and County of San Francisco Mayor’s Office of Housing and Community Development. (2018, August 22). Inclusionary Affordable Housing 

Program Monitoring and Procedures Manual. Retrieved from 

https://sfmohcd.org/sites/default/files/Documents/MOH/Inclusionary%20Manuals/Inclusionary%20Affordable%20Housing%20Program%20Ma

nual%20-%202018%20Draft.pdf

xviii Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

xix City and County of San Francisco Mayor’s Office of Housing and Community Development. (2019, June 10). MOHCD Sample BMR Closing 

Documents. Retrieved from 

https://sfmohcd.org/sites/default/files/Documents/MOH/BMR%20Ownership/SAMPLE%20Inclusionary%20BMR%20Closing%20Documents.pdf

xx United States Department of Housing and Urban Development (HUD) Office of Policy Development and Research (PD&R). (n.d.). Income Limits 

| HUD USER. Retrieved August 13, 2019, from https://www.huduser.gov/portal/datasets/il.html#2017

xxi Only 28 banks have ever made a mortgage via the program, including some who are no longer approved lenders

xxii Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

xxiii Independent mortgage companies are not subject to the regulatory provisions under CRA.

xxiv This analysis is based on demographic data compiled by SF MOHCD that represented 81% of units currently in the program. 

xxv Maximum income for a family of four at 80 percent of AMI in 2018 was $94,700. 

https://sfmohcd.org/sites/default/files/Documents/MOH/Asset%20Management/2018%20AMI-IncomeLimits-HMFA_04-06-18.pdf

xxvi Bureau, U. S. Census (2017). American FactFinder - Total Population in Occupied Housing Units by Tenure by Year Householder Moved Into 

Unit for San Francisco, 2017 American Community Survey 1-Year Estimates. Retrieved August 8, 2019, from 

https://factfinder.census.gov/bkmk/table/1.0/en/ACS/17_1YR/B25026 

Phinney, R. (2013). Exploring Residential Mobility among Low-Income Families. Social Service Review, 87(4), 780–815. 

https://doi.org/10.1086/673963 

xxvii Krishnan, R. (2019, January 23). Buyer and Seller Closing Costs in SF | Ruth Krishnan—Top SF Realtor. Retrieved September 16, 2019, from 

https://ruthkrishnan.com/buyer-and-seller-closing-costs-in-sf/

xxviii City and County of San Francisco Mayor’s Office of Housing and Community Development. (2019, June 10). MOHCD Sample BMR Closing 

Documents. Retrieved from 

https://sfmohcd.org/sites/default/files/Documents/MOH/BMR%20Ownership/SAMPLE%20Inclusionary%20BMR%20Closing%20Documents.pdf

xxix Fannie Mae. (2009, April 1). B5-5.2-04: Loans with Resale Restrictions: Legal Considerations (04/01/2009). Retrieved September 5, 2019, from 

https://www.fanniemae.com/content/guide/selling/b5/5.2/04.html

xxx Federal Housing Finance Agency. (2016, December 13). FHFA Issues Final Rule on Fannie Mae and Freddie Mac Duty to Serve Underserved 

Markets | Federal Housing Finance Agency. Retrieved September 6, 2019, from https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-IssuesFinal-Rule-on-Fannie-Mae-and-Freddie-Mac-Duty-to-Serve-Underserved-Markets.aspx

xxxi Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

xxxii Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.

xxxiii Matt Weber, Grounded Solutions Network. (2018). Information, Barriers, and Recommendations to Increase Loans Sold to Fannie Mae from 

Buyers in San Francisco’s Inclusionary Housing Program, San Francisco, CA. Grounded Solutions Network.