Michael, Renter in Fremont, CA

Hi, what does it mean " City provide 20% mortgage with no interests, no monthly payment."?

Asked by Michael, Fremont, CA Tue Jan 28, 2014

This question was asked from http://www.trulia.com/property/3143559067-3681-Adams-Ave-Fre…

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BMR properties, depending on the city, may qualify for partial financing through the city as a subordinate 20%. Best option is to contact the city to find out more about the program and also contact your lender to see if they have any issues with a subordinate financing.
0 votes Thank Flag Link Wed Feb 26, 2014
Some good answers below and I would add that if you're currently working with a lender for your (general) loan pre-approval, make sure the City programs that apply to this property will work with the first mortgage you'll likely obtain. There are two aspects of this that need to be OK'd by your lender:

1) The property appears to have a BMR (below market rate) deed restriction.
2) The City may provide a type of second mortgage that will typically need to fit into eligible subordinate financing guidelines.

Long/short, talk to your lender to make sure this property can be conventionally financed. If you have any questions, let me know.

Rob Spinosa
0 votes Thank Flag Link Tue Jan 28, 2014

It sounds like you may be looking at a City second program. Typically it is not a 20% loan, but many cities now have programs for those with very low to low income to allow them to purchase a home.

Those that take advantage of those programs will find the second loan is deferred for a period of time or until the home is sold.

Also typical for those types of loans, the City then has first priority when selling the property and for a time (about 30 years or greater), the home remains only sale-able to the same type of buyer with the City controlling the applicants for future purchasers.

It varies from City to City how the program is run - here is a link to the City of Fremont's Affordable Housing program to give you some insight:

0 votes Thank Flag Link Tue Jan 28, 2014
Thanks a lot for your in depth answer.
Flag Wed Jan 29, 2014
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