SAN FRANCISCO (KPIX) — There’s good news for first-time home buyers trying to break into the Bay Area’s competitive housing market. They now have another tool to help cover the cost of down payments and closing costs if they can commit to staying in their new neighborhood for five years.

CalHFA’s Equity Builder loan-forgivable allows a new buyer to get up to 10% of the property price covered for their first home if they qualify based on the median income of the area of ​​the county where they plan to move. to move out. For most of the Bay Area, 80% of the AMI in local counties is $106,880, and in Santa Clara County the figure is $118,960.

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“Homeownership is one of the best ways to build intergenerational wealth, there is a big wealth gap between different groups, especially in California,” said California Housing Finance spokesman Eric Johnson. Agency. “In many cases, the rent they are paying, with today’s interest rates, is actually higher than their mortgage payment would be for an equivalent space.”

“I think this is an incredible opportunity,” said real estate agent Eli Kuo. “Suburbs have become extremely competitive, and as a result, large downtown areas like San Francisco and Oakland, which are full of condos, don’t have the same appeal.”

Kuo says some of the condos he’s listed in neighborhoods like South of Market or Mission Bay might be suitable for those buyers who have the income but haven’t saved enough to cover the down payment. He says that in suburbs like Daly City, he saw 200 screenings in the first weekend for a “superior repairman” house. Meanwhile, SoMa condos could have 50 showings over multiple weekends.

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“You can’t suddenly add $300,000 above the list, you can only do the amount you’re pre-approved for,” Kuo said. “If they’re competing in an area with less competition like downtown San Francisco or Oakland, they may have a chance.”

Johnson acknowledges that cash buyers and investors will always be a challenge in such a hot housing market, but this tool will hopefully give more Californians the chance to start building generational wealth for their families. He encourages anyone interested in the program to speak with one of CalHFA’s preferred loan officers.

“There’s no magic bullet for housing, because it’s going to be something here, something here, something there, something there,” Johnson added. “It’s possible you can buy a house even with all the bad news that seems to be happening every day.”

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To learn more, visit calhfa.ca.gov/homebuyer/programs/forgivable.htm.