Program Overview
The Teacher Next Door Loan Program provides Downpayment Assistance loans to credentialed Teachers employed by the San Francisco Unified School District. The loans are forgivable according to the years of service the teacher remains in the school district.
Borrower Eligibility:
To be eligible for a TND loan, a borrower must be a credentialed teacher currently employed by the San Francisco Unified School District, and have a combined household income of no more than 200% of the AMI of SFMA.
First-time homebuyer: The TND loan is for the purchase of the teacher’s first property in San Francisco. The property must serve as the teacher’s principal residence (be owner occupied).
Homebuyer Education Requirement: Borrower will be required to complete a first-time homebuyer education course through one of MOH’s 5 approved housing counseling agencies. A certificate of completion of homebuyer education must be included with the application package.
First Mortgage: All City loan approvals are made in conjunction with a first loan commitment from a bank or mortgage lender. The loan can be fixed or adjustable interest rate loans. The mortgage payment should include principal and interest, as long as it does not have interest only, option ARM, balloon or negative amortization payment options.
Debt-to-Income Ratio: Applicants monthly housing debt, including property taxes, property insurance, and if applicable mortgage insurance and homeowner’s association dues cannot be less than 38% of the household’s gross income. The ratio of monthly housing costs, plus all other household monthly debt (including credit cards, car payments, etc.) should not exceed 45% of the household’s gross income.
First time homebuyer counseling is required for all City Downpayment Assistance Loans
Property Eligibility
Properties purchased with TND funds must be single-family residences units in the City of San Francisco, which include: detached single-family house, condominiums and townhouses.
Maximum Loan Amount
The loan amount available for TND loans is $20,000.
Loan Terms:
The maximum loan amount under the TND program is $20,000. The loan may be used for either closing costs or downpayment. There is no interest, nor shared appreciation. TND loans may be layered with DALP, City Second loans, and used for the purchase of BMRs and Condo Conversion units, if the teacher also meets the income eligibility criteria for those programs. If the teacher moves out of the City and County of San Francisco or leaves the San Francisco Unified School District within 5 years of the date the loan is issued, the loan must be paid back in full. After year five, the loan is forgiven at a rate of 20% per year, and at the end of the 10th year, the loan is forgiven in its entirety. The following chart illustrates repayments for TND loans:
If the property is sold or the teacher leaves the SFUSD, then the following is due back to the City:
|
Year 1 $20,000 |
Year 6 $16,000 |
|
Year 2 $20,000 |
Year 7 $12,000 |
|
Year 3 $20,000 |
Year 8 $ 8,000 |
|
Year 4 $20,000 |
Year 9 $ 4,000 |
|
Year 5 $20,000 |
Year 10 $ 0 |
1. 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 MOH’s subordination requirements and be approved by MOH.
Owner Occupancy Requirement
· The borrower must occupy the purchased property as the primary residence within 60 days after close of escrow.
· Properties that have received City funding must remain owner occupied 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.
To get more information about this Program
If you have questions about this or any other down payment assistance programs that may be available in your area call us at 1-866-667-6724 .
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