2 minute read
What's a BMR?
www.DanvilleLivingCA.com @DanvilleLivingCA #DanvilleLivingCA
By Janice Jordan, Compass Realty, Resident since 1998
Recently I saw a home for sale in SF that would normally sell for over $1 million dollars that was for sale for $355,000.
Hint: A BMR is NOT a cool, German automobile
How could this be?
This is called “Below Market Hint: It is NOT a cool German automobile! Rate Housing.” It is the supposed answer to cities whose housing has become unaffordable for the working class or the just graduated population. This is a requirement of all builders who build new subdivisions to offer a certain percentage of their homes at a very low price.
Does it work?
There are many “qualifications” in order to make an offer on a BMR. There is a maximum income threshold, based on number of people in the family. You must be a first time home buyer. In some cases, you must currently live and/or work in the same town in order to qualify.
Ok, so let’s say you fit those criteria, then what?
You find a realtor to help you write the offer. Best to find a realtor who is familiar with this BMR program so that they know what ‘closing costs’ you can pay and what costs the seller must pay. You are NOT allowed to bid OVER asking. So, you and 50 other people, just like you, will be bidding on this home. And, if all the offers are exactly alike (because you can’t bid over asking) then who decides who gets the house? The city that set up this program will make the final decision and some cities use a point system. 1 point if you are a vet. 1 point if you are retired. 1 point if you live in the same town. 1 point if you work in the same town. 1 point if you are disabled. Those with the most points will get first priority to whittle down the field of offers.
Let’s say you ‘get’ the house ….
Yeah celebrate!! You get to enjoy home ownership at a fraction of the cost of your neighbors for as long as you want. But, there are restrictions with ownership... you are not allowed to rent the home and when you are ready to sell, you cannot set the price. The city will require you to sell the home to another BMR buyer and a price that they set based on current market low income standards. So, you can’t enjoy the benefits of the wonderful California appreciation gains like your neighbors will, but you have had the benefit to live where you work, school your children in local schools with high educational standards and afford a lovely home for less than you could rent a similar home. There will be some appreciation that you can benefit from, but it will be far less than a non BMR home.
As always, call me directly if you have any questions or would like to learn more about these programs in your city. See you around town. ~Janice
