Dream Keeper Downpayment Assistance Loan Program (DK-DALP) came as part of Mayor London Breed's Dream Keeper Initiative. To learn more, visit www.dreamkeepersf.org
Through the DK-DALP, MOHCD is providing an additional opportunity for low to middle-income buyers to compete in San Francisco’s high-cost housing market.
The DK-DALP is a down payment loan up to $500,000 to bid on a property on San Francisco's open market. The loan must be used on the downpayment of a residential property that will become a primary residence. The owner can re-sell the unit at market prices.
The DK-DALP is a silent second loan that requires no monthly payments. When the property is sold or transferred, the owner pays MOHCD back the principal amount of the loan, plus an equitable share of appreciation.
Applicants are encouraged to work with a MOHCD-approved lender on the DK-DALP preferred list.Back to top
How to apply for DK-DALP
Before applying, the applicant must complete the following steps:
- Attend a DK Homeownership Information Session
- Complete a DK one-on-one counseling session with a DK Housing Counseling Agency
- Complete 10 hours of first-time homebuyer education
- Obtain a first loan pre-approval from a MOHCD-approved lender
- Complete the DK-DALP Readiness Form to certify that you have completed all of the above steps. Upon certification, you will see a link to download the DK-DALP Application.
- Complete the DK-DALP Application and gather your required documents into one PDF
- Upload the PDF via this secure link (click to access the link)
If you have technical issues uploading your complete application packet, contact Aneka.Harrell@sfgov.orgBack to top
There is no fee to apply for DK-DALP pre-approvals.
There is a non-refundable fee to process the paperwork of the DK-DALP loan for final approval. This will be collected when the funds are reserved to close on a property. See MOHCD program fees.Back to top
MOHCD will process applications on a daily basis and in the order in which they were received until all DK-DALP funds are reserved or distributed.Back to top
Loan reservation period
Only one (1) reservation (i.e. pre-approval lottery application) is permitted per eligible household.
Duplicate pre-approval applications from one eligible household, whether with one lender or multiple lenders, will automatically result in disqualification of all applications. Borrowers are encouraged to shop around to find the best participating lender that suits their needs but must choose only one lender in connection with DK-DALP.
A reservation does not constitute final loan approval nor guarantee funding. A DK-DALP loan will only be funded when the borrower fulfills the loan commitment from MOHCD, satisfies the reservation timeline described below, and meets the DK-DALP requirements.
The pre-approval is good
for 90 calendar days. During
this period, borrowers must
enter into a sales contract.
|90 calendar days||Buyer|
|DK-DALP Loan Submittal Period
Following the execution of a
sales contract, the Lender must
submit a complete DK-DALP loan
packet to MOHCD.
|30 calendar days||Lender|
|DK-DALP Review Period
MOHCD will review
the DK-DALP loan packet
|15 business days||MOHCD|
|Loan Commitment Period
Upon loan approval, MOHCD
will issue a Commitment Letter
that is good for 30 calendar days.
|30 calendar days||MOHCD
Maximum loan amount
The maximum DK DALP loan amount is up to $500,000. The qualifying loan amount will be the minimum amount necessary, based on the borrower’s financial need to buy the home.
Borrowers may not alter their finances on the application to qualify for a larger DK-DALP loan. These include:
- reducing the gift funds stated on the application
- lowering the first mortgage loan amount the borrower was pre-qualified for
- reducing third-party credits and contributions
- Any other changes for the purpose of increasing the DK-DALP loan amounts
Reasonable fee changes resulting from an underestimation of customary closing costs are acceptable.Back to top
Wealth building grant
Applicants may receive up to $30,000 to be used toward a down payment, closing costs, and/or prepaid items. The grant accrues no interest with no monthly payments and will be completely released after 3 years from the close of escrow. If the property is sold or transferred, or if the borrower is non-compliant with the DK-DALP rules within 3 years, the grant is due back to the City in a lump sum amount.Back to top
- First-time homebuyers: All adult household members must not have any ownership interest in a residential unit for the last three years.
- Completed homebuyer education from Homeownershipsf.org
- Maximum Income Limits: household income must not exceed 200% of the Area Median Income (AMI).
- The combined income of all household members 18 years or older, who will be living in the property, must be included in the determination of income.
- Minimum Downpayment: Borrower must contribute a minimum of 1% of the purchase price toward the down payment or closing costs. The entire 1% can come from gifts, if necessary.
- Liquid Assets: Borrower must have no more than $60,000 after purchase.
- Post-Purchase Reserves: Borrower must have a minimum of 2 months’ reserves after purchase. In addition to Liquid Assets, vested funds from retirement accounts that permit withdrawals may be also used for reserves. This reserve should include 2 months of:
- Mortgage Insurance (if any)
- Property taxes
- Hazard insurance
- Homeowner’s association dues
- Occupancy: The property must be owner-occupied during the life of the loan.
- Household Size: The size of a Household must be no greater than the total number of bedrooms in the Property plus one (1). In other words, a single person may purchase a two-bedroom property or a smaller property if they choose; a two-person household may purchase a three-bedroom property or a smaller property if they choose; and so on.
- Eligible Household Member: An eligible household member must either be:
- On title and loan of the property. All spouses or domestic partners must be included in the household and must appear on the application, title, and loan.
- Listed as a dependent on tax returns. All household members who are under 18 years of age must be the legal dependent of an adult household member, as listed on the two most recent tax returns. An unborn child will be not counted as a household member. Elderly adult household members may be considered dependents as long as they are listed as dependents on the two most recent tax returns. All income from dependent adults and children must be included in the total household income. A spouse or domestic partner of any titleholder is not considered a dependent.
- Primary Financing: Borrowers must be able to qualify for the first mortgage from an approved lender prior to submitting an application for DALP. Borrowers must have sufficient funds to meet the required downpayment, closing costs, and necessary reserves.
- Lien Position: DK-DALP loan must be in the second position behind the first mortgage.
- Impounds: The first mortgage lender must collect and manage impound accounts for property taxes and hazard insurance for the loan term.
- Loan-to-Value Requirements (LTV and CLTV): The minimum Loan-to-Value (LTV) is 50%, and the maximum Combined Loan-to-Value (CLTV) is 105%.
- Debt-to-Income Ratio: Borrower monthly housing debt, including property taxes, property insurance, and if applicable mortgage insurance, and homeowner’s association dues cannot be less than 30% of the household’s gross income. The ratio of monthly housing costs, plus all other monthly debts (including credit cards, car payments, etc.) should not exceed 45% of the household’s gross income.
- Front-End (Housing) Ratio: No less than 30% and no more than 43%. MOHCD may consider a maximum front-end ratio of up to 45% if two or more indicators are present:
- Proven ability to devote a larger amount of income to housing expenses. The applicant has made rental payments for 12 consecutive months that are equal to or greater than the proposed monthly payments for the housing being purchased
- At least 6 months of housing expenses in reserves through liquid assets, or at least 12 months of housing expenses in reserves through non-liquid assets and retirement accounts
- FICO score greater than 700
- A large down payment (20 percent or more) toward the purchase of the property
- The proposed housing expenses will not increase more than 5% over previous housing expenses
- Back-End (Total Debt) Ratio: No more than 45%.
- Co-Signing: Co-signing for a DK-DALP loan by a non-household member is not allowed.
- Loan Signing: No power of attorney is allowed. All applicants must be physically present to sign loan documents.
- Closing Costs: DK-DALP funds may be used to cover customary, non-recurring closing costs normally incurred in a residential real estate transaction, and subject to MOHCD's approval in its sole discretion.
- Loan Terms: DK-DALP is a no-interest, no-monthly payment, deferred loan. The principal balance amount plus a share of the appreciation becomes due at the end of term or when the borrower sells, rents, or transfers title on 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.
- For example, if the borrower receives the DK-DALP loan in the amount of $500,000 with the purchase price of $1,250,000, the DK-DALP loan amount is 40% of the purchase price. Therefore, the share of appreciation would also be 40%.
See all MOHCD loan terms.Back to top
- You will first be required to complete the online DK-DALP Readiness Form
- 2023 DALP Manual
- MOHCD Lender Closing Checklist (fillable PDF)
- For final approval after getting a ratified purchase agreement
- Sample DK Closing Documents (PDF)
- DK-DALP Flyer (PDF)
DK-DALP sales agent list
Please note: As an applicant of the DK-DALP, you are not obligated to work with any of the sales agents listed below. This list is being provided as a resource only.
Assurity Realty Corporation
510-221-6203 or 510-992-9865
Berkshire Hathaway Home Services
Berkshire Hathaway Home Services Drysdale Properties
Better Homes & Gardens, Reliance Partners
Coldwell Banker Realty
Michael Wayne Jackson
510-872-2360 or 415-602-8912
Complex Living Real Estate
Corcoran Icon Properties
Harper Real Estate
Martin Encinas Leon
KAI Real Estate
Keller Williams Realty
Kinetic Real Estate
Taja S. Conley
Pacific Edge Real Estate
RE/MAX Prestigious Properties
Real Estate Revolution
Realty ONE Group Zoom
Twin Oaks Real Estate
Lorraine Dacanay Breaux