Housing Costs and Ratio Requirements
A household purchasing the BMR must meet minimum and maximum housing and debt ratio requirements. Program participants may be disqualified from purchasing the BMR if their housing cost ratio is either below the minimum or over the maximum ratio allowances.
Housing Ratio Requirements - A housing ratio is the percentage relationship between total monthly costs to own the property in relation to the gross monthly household income. Gross household monthly income applied to determine the housing ratio is derived from the household’s lottery application and confirmed in the first Lender’s loan approval process. Gross monthly household income excludes tax deductions. Monthly housing costs include the principal and interest portion of the mortgage payment, property taxes, home insurance, and homeowner’s association fees (HOA). The housing ratio is calculated by dividing the total housing costs by the gross monthly household income. The 1st lender is responsible to calculate and provide BAAHA and the City the housing ratio calculation. Program eligible households must have a housing ratio that falls between a floor of 28% (lowest allowed) and a ceiling of 45% (highest allowed).
Debt Ratio Requirements – The debt ratio represents the monthly cost of home ownership combined with the monthly costs to maintain the household’s existing debt. A household’s monthly debt equates to the combined minimum monthly payment required by each creditor. The monthly debt payment is added to the housing costs and the sum is divided by the household’s gross combined monthly income. The debt ratio may not exceed 45% of the household’s gross income. Gross income is based on the income applied by the household’s Program Certified first lender to determine the housing and debt ratio.
First Time Homebuyer
Applicants must be first time homebuyers. To be a first time homebuyer, all members in the household may not have been on title or owned a real property three years prior to the date a lottery application is submitted. Prior ownership includes being on title and partial ownerships of any real property.
Program Eligibility and Ownership Requirements
Applicants must meet the following requirements to purchase the Walnut Creek BMR home.
Eligibility | 555 Ygnacio Valley Rd #108
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Maximum Household Income
Ownership of the BMR home requires that a household’s gross combined income may not exceed 80% of Contra Costa County’s Median Income. Maximum household income is based on household size. Household size includes all dependent and non-dependent members that will be occupying the BMR home at the time of purchase. Gross incomes for all non-dependent adult members must be accounted for and represented in the lottery application. Maximum gross household income allowances based on household size, for the year of 2025, are depicted below:
Program Lottery Live/Work Preference
The City has established a live and or work lottery preference. Applicants who qualify for the preference have priority for lottery selection. Qualifying for a preference is not a requirement to submit a lottery application. A preference is provided for households that have a member the lives or works in Walnut Creek. Work eligibility is based on your employer’s address, not your home address. Working from home does not fulfill Walnut Creek’s work preference requirements. Self-employed individuals and businesses working in Walnut Creek must have a business license issued by the City of Walnut Creek. The business license must have been obtained six months prior to the lottery date, and be registered to an address in the City of Walnut Creek. Only one adult household member needs to meet the requirement for a household to qualify for a particular preference.
Household Size and Composition
The minimum household size is one person and the maximum household size is three people. All non-minor household members who are not dependents must be on title when the property is purchased. Qualifying dependents must be designated on 2025 federal tax returns. To be claimed as a dependent, adult children must either be permanently or totally disabled; or under the age of 24 and a full time student. Full time students must be carrying a 12-unit class load and live at the residence for at least six months each year. School transcripts will be required for eligible adult students being claimed as dependents. Qualifying household size influences qualifying household income requirements and allowances; accordingly, applicants must identify all household members at the time a lottery application is submitted. A spouse cannot be claimed as a dependent on your lottery application.
Financial Capacity
The household must demonstrate financial capacity to purchase the BMR. This will include:
- A minimum 3% down payment ($7,566) is required. All funds must be in a bank, trust, retirement, or investment account (no mattress money/cash is allowed). In addition, a buyer should also have approximately 2% of the purchase price ($5,000) for closing costs and reserves. Accordingly, a household should have access to approximately at least $12,600 in liquid funds to consider purchasing this property. Gifts may be provided by first and second degree relatives. All gift funds must be sourced from institutional financial accounts. Reserve and down payment funds may be held in accessible government recognized retirement accounts (401K, 403B, etc.)
- All adult members are required to be on title and must have a minimum FICO score of 640. FICO scores for all adult non-dependent members must be provided on the lottery application.
- Housing costs and ratio requirements are further discussed below. The debt (back end) ratio must be less than 45%. The housing (front end) ratio may not be less than 28% and not exceed 45%.
Occupancy of Home
The BMR property may not be purchased and used as an investment rental property. The BMR owner is required to be a full time resident and occupy the BMR at least ten out of twelve months a year. Strict restrictions disallow the property to be rented out.