Understanding the Forgivable Loan for First Time Homebuyers: What you need to know

CITY HALL — The prospect of owning a home in one of the nation’s most expensive housing markets may become a tangible reality for many.

The San Francisco Board of Supervisors voted 9-1 to pass a revised ordinance establishing the Forgivable Loan for First-Time Homebuyers Fund and Program on Tuesday. The program offers financial assistance to low-and middle-income communities and the possibility of loan forgiveness.

If all requirements set by the program, which is stated on the ordinance's memorandum, are met, the borrower may be eligible for forgiveness of their loan, but only after 10 years of living in the new primary residence.

District 7 Supervisor Myrna Melgar sponsored this law with co-sponsor Supervisors Joel Engardio and Shamann Walton.

“In past decades, our country did a combination of things that were specifically to challenge people not to engage in homeownership,” said Melgar. “It’s targeted towards folks who were harmed by our past policies.”

The new law requires the Human Rights Commission and the Mayor’s Office of Housing and Community Development to manage the program and to oversee the process of forgiven loans.

To qualify for the program, a borrower’s household income cannot be over double San Francisco’s area median income.

$201,700 is 200% of San Francisco’s AMI for a one person household, according to the U.S. Department of Housing and Urban Development’s 2023 Area Median Income chart .

Some prospective homebuyers find this maximum income qualification unappealing.

William Harris, 49, a resident of Noe Valley, has been renting the same apartment for almost 20 years. Despite having intentions of buying a home in the future, Harris is not interested in the program.

“I think it’s building you up to fail,” Harris said. “This discounted avenue to me is incentivizing the lack of wanting to be able to make that kind of income.”

On the first and second reading of the ordinance, Aaron Peskin, the board’s president, voted no. Peskin could not be reached for comment.

The amended program is scheduled to be effective 30 days after Mayor London Breed signs the ordinance if she approves.

Would you sign up for the Forgivable Loan Program?

• Yes, absolutely!
• No thanks!
• I'd have to think about it...