I’m on a small committee of Realtors that works to increase access to homeownership within our community. Last year, we worked with the City of Oakland to help them streamline the City’s Mortgage Assistance Program (MAP), which offers down payment assistance of up to $75,000 to qualifying homebuyers.
Using Oakland’s MAP program in a tough housing market
It’s unfortunate that as more and more buyers are needing downpayment assistance, it’s increasingly difficult to use any program that will add layers to the transaction. Oakland’s real estate market is very competitive, and prices are rising. Many buyers are offering very attractive terms to sellers like fast closing times and very strong financing. This makes down payment assistance programs tough to use, and MAP can be even harder to use than other programs.
One of the most misunderstood and difficult to navigate requirements of the program is City review of the home inspection. City staff review the inspection and before they will approve an application, they require that health and safety issues (even those that are typically found on homes in our market) be addressed. The issues can be taken care of either by the seller or in a report from the buyer as to their capacity to do future repairs before they will approve the application. This is a more extensive review than required by other loans typically used by first time home buyers.
How our committee is helping to shape the program
Those of us who help first time buyers know that opportunities remain. Realtors are still helping people who never thought that they would be able to own homes buy their first homes. There are also Realtors who advocate at the local, State and Federal levels for increased opportunities for lower income buyers, including the expansion of programs like MAP and the Section 8 homeownership program who have seen people of all income levels become homeowners. This battle is harder and harder lately, but we believe it’s a worthy one, and we see first-hand how lives are transformed by homeownership.
One good thing is that the City has changed the way that it evaluates applications for the MAP loan. Our Committee provided input to City officials, and while they didn’t take all of our advice, they did modify some aspects of the program. They reduced the number of areas of the home inspection that they will focus on. Additionally, to expedite the approval process, they state that prior to the City’s review, Realtors can help their clients prepare a package with estimates and an outline of how future repairs will be paid for over time. Realtors who understand this new process and can explain the benefits to listing agents can greatly improve their clients’ chances of getting their offers accepted.
Additionally, the City increased qualifying income maximums and the maximum purchase price to $650,000, which will allow more people to use the program.
Last week I attended a fundraiser for Barbara Lee, and she identified the affordability crisis as one of the biggest issues facing our region right now. In an area where home prices are rapidly increasing, Realtors who are able to find opportunities for first time buyers and work with programs like MAP provide critical assistance to long time Bay Area residents who are fighting displacement. Homeowners with a fixed-rate mortgage tend to have stable housing expenses and the ability to build wealth by applying their monthly payments to a mortgage. Also, they don’t face the possibility of eviction that is plaguing so many renters.
We can’t fight this battle alone and rely on the support of our government and community partners. Even though this is hard work, I am very proud to be working with so many individuals and groups who are seeking solutions to this issue.