SAN FRANCISCO (Reuters) - San Francisco has doubled the amount of money it will lend to middle-class home buyers to help with down payments in a market where an influx of high-paid technology workers has pushed prices up, city officials said on Tuesday.
Starting this month, the city will offer interest-free loans of up to $200,000 to first-time buyers for down payments on market-rate San Francisco homes, which have a current sale price median of more than $800,000, said Maria Benjamin, Director of Homeownership and Below Market Rate Programs for the city.
She said $2 million is available for the program annually.
“Given the high cost of homes in today’s market, a higher loan amount is need(ed) to enable low to moderate income borrowers to keep up with market conditions, especially families,” San Francisco Mayor Ed Lee’s office said in a statement.
The move is the latest by city officials to address growing concerns that the city is becoming unaffordable to all but the very wealthy, intensified in recent years by the region’s booming dot-com industry, Lee’s office said.
Several times in recent months, protesters angry about housing costs have blocked Google Inc and other commuter buses that ferry an estimated 45,000 workers daily between their homes in San Francisco and dozens of technology companies based in Silicon Valley, south of the city.
San Francisco’s bolstered loan program will be limited to an annual $2 million from a housing trust established in 2012 that was also doubled in March from $1 million, Benjamin said. First responders in the city will have access to an additional $1 million in available down payment assistance.
The program is aimed at helping people who make too much to qualify for the city’s affordable housing but are still considered to be low or moderate earners, Benjamin said.
To qualify, applicants should make no more than 120 percent of the region’s median income. For a family of three, this would be $104,900, Benjamin said.
Loan recipients are not required to pay the loan back until 40 years after it is issued or when the home is sold or refinanced. At that point, the loan and a portion of the appreciation value will be due, Benjamin said. There will be no interest on the loans.
Under the previous program, which capped the loans at $100,000, applicants received about $80,000 on average in a down payment loan from the city, Benjamin said.
Editing by Cynthia Johnston