Capital Improvements and Special Assessments

Homeowners may only begin claiming capital improvements made ten (10) years after the unit was first occupied. The general guidelines of capital improvements are based on the definition of capital improvements provided by the IRS: add value to the property, prolong its useful life, or adapt it to new uses or any structural changes to a building. 

Keep in mind that, in condominium projects or planned developments, the homeowner's associations (HOA) governing documents (Bylaws and/or Covenants, Conditions, and Restrictions) will typically require the HOA to give its approval on certain home improvement projects, such as plumbing, electrical, aesthetic changes to the exterior, etc. Homeowners shall read the HOA governing documents to learn about restrictions in their building and contact the HOA for approval before making such improvements.

Additionally, HOA-initiated special assessments are considered capital improvements and will be added to the resale price of the home. Regular HOA assessments or dues are not eligible under this policy.

For capital improvements consideration, please submit the following:

• A list of capital improvements with descriptions using the Capital Improvements Submission Form provided by MOHCD.
• The receipt and invoice for each eligible improvement.
• Proof of Payment for each listed capital improvement, such as a cancelled check, bank account statement, or credit card bill statement.
• A copy of site or building permits, if required by SF Department of Building Inspection.
• Contractor’s license number for Projects exceeding $500.
• Photos of "before remodel" and "after remodel" (recommended).
• If the request is submitted by a third party on behalf of the homeowner, include a completed Third Party Authorization Form. 

For special assessment consideration, please submit the following:

• A list of special assessments with descriptions using the Capital Improvements Submission Form provided by MOHCD.
• An invoice from the homeowner’s association verifying the amount and date the assessment was billed to the homeowner.
• Proof of payment for each listed special assessment, such as a cancelled check, bank account statement, or credit card bill statement.
• A HOA "billing notice" or similar document for the special assessment. The document must state the purpose of the special assessment, the amount each unit owner is obligated to pay, and the due date of the special assessment.
• If the request is submitted by a third party on behalf of the homeowner, include a completed Third Party Authorization Form.    

MOHCD may request additional documentation as deemed appropriate.

Due to an increase in volume, MOHCD is prioritizing Capital Improvement requests related to a sales transaction. For all other requests, MOHCD may take longer to process your request. We appreciate your patience.

Once the housing unit becomes eligible for capital improvement credit, homeowners may begin submitting documentation of completed work in accordance with the unit's capital improvement policy timeframe. 

To maintain affordability, MOHCD may reject improvements that would price the home out of affordability. This does not mean that homeowners cannot improve or upgrade their property, only that the improvement or update may not be included in the resale price. 

Capital improvement policies under homeownership programs are listed below:

• Inclusionary Affordable Housing Program Manuals (2018, 2013, and 2007)
• 1993 Capital Improvements Policy  (PDF)
• BMR Limited Equity Homeownership Program (SFRA – LEP) (PDF)
• Former City Second Loan Program (PDF)

For a quick overview of the capital improvement policy by program, please view the  Capital Improvements Policy Chart (PDF).

Contact Information:
Loan Servicing
Mayor’s Office of Housing and Community Development
1 South Van Ness Avenue, 5th Floor
San Francisco, CA 94103
(415) 701-5500