Young couple need advise for a first home

Asked by Homebuyer, San Francisco, CA Mon Sep 15, 2008

Currently my husband and I have a little over $50,000 in savings and our current salaries are $75000 gross per year combine and our income will grow. We are 24, no debt, good credit score, no rent. We really want to get a BMR unit but seems like there are more options out there. What about FHA loans? Please advise

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Danielle Laz…, Agent, San Francisco, CA
Tue Sep 16, 2008
Hi there,

Until I know your circumstances better, I cannot give my best advice for you. However, from what you write, it sounds like you should try to buy outside of the BMR program.

Right now, there are excellent loans available through FHA and others and rates are down A LOT. If you buy a BMR, you are capping its investment potential. It seems from these numbers that you may be able to do a starter condo or TIC. Get into the market and then move up after a few years. Keep your place as a rental or sell when it has appreciated.

I recommend you speak to a reliable and experienced mortgage broker about your options. Email me and I'll send you the names of a couple of folks I work with frequently and who are excellent choices for first time buyers. You don't have to commit to anything, just get solid, accurate info for your circumstances.

Also, see my post about how to choose a mortgage broker and other first time buyer info I have on my blog. I work with A LOT of newbies and love helping folks get into their first home. :)

All the best,
Danielle Lazier Zephyr Real Estate
danielle (at)
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, ,
Tue Sep 16, 2008
I am an approved lender both for the Mayor's Office of Housing MCC program and for the Redevelopment Agency's BMR program. There are pros and cons to each program which are too numerous to list and discuss in this forum. I would be happy to advise you; please contact me if interested.
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Sally Rosenm…, Agent, San Francisco, CA
Mon Sep 15, 2008
Dear Homebuyer,

At $75,000 gross you can get into the Mayor's program..... Go to and check out the rules. You need to attend a class to get certified and prove to the Mayor's office that you fit in within the guidelines. You should also sign up to receive email notices about each and every new BMR that comes out. Please be sure to read all the information as there are rules and regulations.

In fact, I am on the list to receive emails about BMR units for my clients and potential clients. It is a good way to get notice of them.

With regard to FHA and all loans, banks and institutional lenders are making you go through hoops. I can email you a list of lenders and mortgage brokers I feel are terrific if you will contact me - or by phone as noted on my Trulia bio.

Most realtors (and I am no exception) have First-Time Buyer books and maps with our Districts and Subdistricts to give to our clients at no charge. So please check with me or another Agent to help you get started!


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CJ Brasiel, Agent, San Jose, CA
Mon Sep 15, 2008
FHA loans are available for the first time in California in a long, long time. There are advantages with FHA due to low down payment requirements (3-5%) and a fixed rate loan. The debt to income ratio can be restrictive so it is best to sit down with a lender (or two) and see what options are available. Closing cost on FHA loans can require a 1.5%/loan amount point as well as impounds of up to 6 months for taxes and insurance. Less than 20% down creates a need for mortgage insurance as well.

I have recently worked with lenders with several buyers utilizing the FHA loan. One of the only ways they could have bought a home right now. It is a great option for many and I would encourage you to sit down with someone that will walk thru the numbers with you.

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Jason Chapin, , San Francisco, CA
Mon Sep 15, 2008
Hi Homebuyer,

It sounds like you have a good savings started. I would suggest that you develop a plan with a trustworthy mortgage professional. With $75,000 gross income and no debts you'll have some options. There are a number of reputable sources here in San Francisco to help you craft a financial plan. If you need a referral, please let me know.

There are several developments priced at $500k or below in San Francisco right now. There are even better deals across the bay in Emeryville with city views. With your down payment and income, your are going to be very close to this price range.

I think it's a good strategy to work out the down payment, monthly payments and general price range with a mortgage professional first. Then look casually while you live according to that budget for a few months. As you live according to the budget, you'll be saving additional money for your down payment AND testing your purchase power. If you can stick to, say, a $450,000 purchase price for four to six months, you'll be in a better position. You'll also have a good handle on the market and be ready to move forward when the right opportunity presents itself.

Good luck to you and your husband! I'm happy to forward available listings while you explore options.

Jason Chapin
Urban Bay Properties
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Scott Godzyk, Agent, Manchester, NH
Mon Sep 15, 2008
You should not have a problem with getting a loan, fha is great for first time buyers, but with fha it is more for somewhere you will live for 5-7+ years, ask if the loan has a recapture clause where you would have to pay a certain amount if sold or refinacned before that time is up, much like a prepayment penalty. seek a local and trusted loan officer, stay away from the internet lenders. the local loan officer will compare what is available whne he pulls your credit. good luck
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