Harry, Home Buyer in Marin City, CA

What is BMR Unit?

Asked by Harry, Marin City, CA Wed Aug 6, 2008

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Hi,

This is a Below Market Rate unit. These units are sold to individuals that meet certain income requirements at prices below current market prices. The idea is to allow for affordable housing in the city. There is an application that must be filled out and your income cannot exceed the requirements set forth by the city. In addition typically if you go to sell the property, you will need to sell it as a BMR unit. Appreciation of the property is typically set and the rate of inflation and not more. Each city has different requirements and if you are interested you can check out more regarding the requirements at: http://www.sfgov.org/site/moh_page.asp?id=48003.

If you have any other questions, you can email me.

Warm Regards,

Lisa Cartolano
Alain Pinel Realtors
0 votes Thank Flag Link Wed Aug 6, 2008
A BMR unit is a "Below Market Rate" unit. Buyers must qualify with certain income limits, etc. You buy them below market and you must sell them below market.

It's a great opportunity for would-be homeowners that are priced out of the San Francisco market, especially those looking for a very long-term home and don't expect their financial situation to change dramatically over the years.

However, if you can stretch to make a regular purchase work, that is often the best bet so you can take advantage of the long-term appreciation San Francisco offers as well as the tax-free capital gains upon sale.
0 votes Thank Flag Link Wed Aug 6, 2008
Every developer in San Francisco has to either dedicate units in a development to be made available for buyers that can't afford to buy market rate units.
They can either include them in the building or pay a fee to the Mayor's Office of Housiing that in turn is given to non-profit developers that will build for the low, median and work force incoome levels.
Each development is targeted to a specific income level. The pricing is set according to the area median income, AMI. To buy you need to qualify, to qualify you need to have an income in the bracket they are targeting. Low income is typically below 30% AMI, moderate is 30% to 80% AMI and workforce is 80% to 130% of AMI. The incomes are on the web site that Melanie has given. They track a percentage for single person all the way up to a family of 9.
The draw back is that when you sell and move from the BMR unit it has to be sold at the same percentage of AMI that you bought it at. So instead of market appreciation what you get is appreciation based on income levels rising. It seems to me that this will be a disincentive for movement and not provide the opportunity to move into the market rate housiing.
This situation exists in many areas because there hasn't been enough housing built to keep supplies at a level that can meet demand. Valid question is can San Francisco possibly build enough to meet dmand.
I am very involved in the SF market and work on affordable housing issues with various groups.
Hope that answers your question.
Web Reference: http://www.FogCityGuide.com
0 votes Thank Flag Link Wed Aug 6, 2008
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
MVP'08
Contact
A "Below Market Rate" unit is sold under a program through the Mayor's Office of Housing for low- to mid-income first time home buyers. There is an application process and income requirements which you can check out at the link below.
0 votes Thank Flag Link Wed Aug 6, 2008
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