Below Market Purchase Program

BMP

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For New Open Application submission periods and deadlines, please check our Homebuyer Calendar.

What is a BMP Program?

California cities establish home purchase programs, often called Below Market Purchase (BMP) programs to facilitate the inclusionary housing requirements mandating housing developers to make a percentage of housing units in new residential developments available to low- and moderate-income households.

The City of Santa Clara has operated a BMP Program since 1995, assisting low- and moderate-income families achieve the goal of homeownership and fulfill State mandates for the production of housing for all income levels.

What do I need to know before I consider applying to the City of Santa Clara BMP Program? 

  • The BMP is for first time homebuyers
  • Yearly gross household income limits apply
  • Provides affordable monthly payments
  • Prospective applicants must obtain a pre-approval from an approved BMP lender
  • Down payment is required – Lenders may require a minimum of 5% down. Some units may require additional down payment
  • Homes must be owner occupied for the term of the agreement
  • Homes must be resold to another BMP buyer for the recalculated BMP price if sold during the first 5 program years
  • From years 6 to 20, the home can be sold at market rate with an equity share to the City of Santa Clara. For additional information regarding the resale restrictions, please review other important information below.

There is no broker or realtor incentive for “New Construction” Below Market Purchase Units in the City of Santa Clara

What are the steps?

  • Step 1. Review Program Requirements and Register for the General Interest List
  • Step 2. Complete a BMP Program Prequalification Intake and Review the Eligibility Application
  • Step 3. Attend a Below Market Purchase (BMP) Program Orientation and Application Workshop
  • Step 4. Sign up for a Homebuyer Education Class
  • Step 5. Determine if Your Household is Eligible and Your Next Steps
  • Step 6. Complete BMP Eligibility Application and Set an Appointment

Fill out an online intake form and send to homebuyer@housingtrustsv.org.

We will review your intake form and direct you to your next steps. Please allow for a one to two week turnaround time for an email response. Contact us for any questions regarding your online intake form. The online intake form does not put your household on a waiting list.

Review the Eligibility Application

Applicants must attend the Orientation and Application workshop for the City of Santa Clara BMP Program. The workshop will:

  • Provide a description of the BMP program
  • Discuss the eligibility requirements
  • Review the Eligibility Application and the steps to apply for the program

You and any co-applicants/co-borrowers (who will be either on the loan or on title, including non-borrowing spouses) are required to attend this workshop prior to eligibility determination.

You can find the next workshop scheduled on the Homebuyer Calendar as City of Santa Clara Below Market Purchase Program-Orientation & Application Workshop. Please note you and any co-applicants can take the workshops/classes required in any order.

You and your household can only submit an application during an open application submission period for an available unit by appointment only.

Before submitting an application:

  1. Review the eligibility requirements to determine your household eligibility
  2. Contact BMP Administrator at the Housing Trust to discuss your online intake form and to get prequalified.
  3. Once you are prequalified by the Housing Trust, you will be referred for Prequalification/Preapproval to a lender on the approved BMP lender list.
  4. Please preview/drive-by the new development. Most developments are under construction and site visits are only arranged for approved BMP applicants. Preview the builder/developer’s website.

List of upcoming developments and units are updated as they become available.

You must set an appointment with the Homeownership Program department to submit the Eligibility Application and all required documents before the deadline date.

Additional required documents


Once you have been notified by Housing Trust Silicon Valley of program pre-eligibility for the BMP Program, you must obtain a full pre-approval (only if a prequalification was submitted) from the BMP approved lender within 7 calendar days. Your pre-approval letter from the BMP Lender and credit report will be required to finalize program eligibility.


After determination of program eligibility, the priority level criteria will be applied and you will be notified of your ranking and property availability.


Other Important Information


The BMP home buyer will sign to a 20-year Promissory Note for the difference of the home’s appraised unrestricted Initial Market Value (IMV) and the restricted Affordable Sales Price (ASP) when the BMP home is initially sold. The Promissory Note is secured by a Deed of Trust and Security Agreement which creates a lien on the home. The approved BMP homebuyer will also execute the Below Market Purchase Covenants, Restrictions and Option to Purchase document. This document enforces the following resale restrictions to ensure the property remains affordable.

  • Year 1 through Year 5 of ownership
  • Year 6 through Year 20 of ownership
  • Year 21 and after of ownership

A BMP homeowner who decides to sell their home within this time period must sell to an eligible BMP-qualified, new buyer (a first-time buyer with an income not exceeding 120% of area median income) at a re-established restricted resale price. The principal amount of the City Loan is forgiven and a new principal amount of the City Loan is established for the new homeowner.

A BMP homeowner can resell their home to whomever they choose at the current, unrestricted fair-market price. The BMP homeowner will pay off the principal amount of the City Loan at the sale of the home. The BMP homeowner must also pay a share of the increase in equity in the home to the City.

The BMP homeowner is required to pay back the principal of the City Loan and is able to realize all of the market-driven appreciation in the home above its Initial Market Value (IMV). Resale restrictions expire and the BMP homeowner is no longer required to pay the City a share in the increase in equity in the home.

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