City Program Approval
HUD-Approved Homebuyer Education
Purchase Contract and Close of Escrow
The top three lottery winners will proceed to the next step:
- Find a lender who currently is, or can be, approved by the City to finance City of East Palo Alto BMR purchases. EPACANDO and BAAHA have identified lenders who have extensive experience originating loans to buy BMR properties and who are likely to merit City-approval.
- Secure first (1st) loan approval from your first lender.
The minimum household size must be one (1) person, with a maximum of three (3) 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 2020 Federal Tax Returns. Because qualifying household size influences qualifying household income, applicants must identify household members at the time of application.
Viewing protocols have been established to maintain industry-established COVID-19 safety requirements:
A virtual 3D tour of the exterior and interior of the property is available by clicking here. To maintain and respect privacy for the current owner, the unit number for the condominium will be provided to lottery winners, after the lottery is conducted. The highest ranked lottery winners will be able to visit and view the property prior to entering into a purchase contract.
EPACANDO and BAAHA will be providing a virtual purchase informational workshop that will be conducted on Saturday, December 18th, 2021, from 10:00AM to 12:00PM. The workshop will provide an overview on:
- BMR ownership requirements, restrictions, and responsibilities
- Specific eligibility requirements to purchase the current one bedroom E. Bayshore BMR
- The steps and timeline to go through the purchase process
To make a workshop reservation for Saturday, December 18th click here.
At this point in the process, with all approvals in place, the top three (3) applicants will submit a purchase contract to the BMR seller. The purchase contracts for the top three applicants will be processed in the lottery ranking order. The 2nd and 3rd place winners will be in back up position in case the 1st place lottery winner should fall out of contract. Once a purchase contract is signed, it will take approximately 45 days to close the purchase escrow, to actually buy the BMR home
Below Market Rate Homeownership
East Palo Alto has established lottery preferences that promote ownership for first time homebuyers that reside and work in EPA. Preferences are not a requirement to apply. However, a preference scoring system will be applied in drawing and ranking priority applicants at the lottery. Preferences include:
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 in the past three (3) years (from the time you submit your lottery application).
Program participants may be disqualified from purchasing the BMR if their housing cost ratio is either below or over the minimum and/or maximum allowances. A housing ratio is the percentage relationship between the total monthly costs to own the property in relation to the gross monthly household income that the City and/or the first lender apply towards the housing ratio calculation. Monthly housing costs include the principal and interest portion of the mortgage payment, property taxes, insurance, and home owners association fees (HOA). The housing ratio is calculated by dividing the total housing costs by the gross monthly household income. The City and 1st lender derive the gross household monthly income applied towards the ratio calculation. Gross household income includes the household’s total income prior to all deductions from their payroll earnings. Program eligible households must have a housing ratio that falls between a floor of 28% (lowest allowed) and 45% (highest allowed).
BAAHA has estimated the housing costs, which includes mortgage, taxes, insurance, and homeowners association payment, to be approximately $1,750 per month. This estimate is based on a 3% down payment and a 3.00% interest rate. The number provided is only to be used as an estimate. Your household’s actual costs will vary from BAAHA’s estimate. Variation in costs for individual households will occur due to differences in interest rates, FICO scores, the amount of down payment applied, varying property insurance and mortgage insurance costs, and adjustments (if any) in HOA fees.
Below Market Rate (BMR) homeownership comes with restrictions and responsibilities that BMR owners must adhere to. Restrictions on the BMR will be in place for a fifty-five (55) year term which commences on the date of purchase. Primary restrictions during the restriction period include:
- The BMR must be sold at an affordable resale price that EPA assigns at the time of the resale.
- The BMR must be sold to an eligible buyer whom the city must approve.
- There are refinance guidelines and restrictions. All refinances must be approved by EPA.
- The property must be maintained in good condition at all times.
- There are strict restrictions that disallow the property to be rented out.
- There are guidelines and restrictions in passing title to an heir and any other non-BMR Program approved individual(s).
To read more about BMR home ownership, click here.
Financial Capacity
EPACANDO and BAAHA
Program Eligibility Requirements
Questions and More Information
All household members on title must complete a HUD approved homebuyer education course to purchase the East Palo Alto BMR unit. Click here to access sources to complete your approved education requirements. We also encourage applicants to conduct your own search for HUD approved homebuyer education courses on the internet. A certificate of course-completion is not a requirement to apply for the lottery, but is a requirement for purchase.
First Time Homebuyer
Lottery Application
If you have any additional questions, please contact BAAHA by email at info@myhomegateway.com. Please make certain to state that you are inquiring about the East Palo Alto BMR and provide us with your phone number.
Ownership of the BMR home requires that a household’s gross combined income may not exceed 60% of the Area's Median Income as assigned by the City of East Palo Alto, and adjusted for household size. Gross income includes the household's total income prior to all deductions from their payroll earnings. For self-employed individuals, the City applies net income provided in the household's 2020 Federal Income Tax Returns. Gross maximum income per household size cannot be greater than:
Your Next Step
1765 East Bayshore Road, East Palo Alto
Occupancy of Home
Live and/or Work in the City of East Palo Alto
The City of East Palo Alto (EPA) contracts with a local non-profit housing agency, EPACANDO, to administer their BMR Program. EPACANDO works directly with the Bay Area Affordable Homeownership Alliance (BAAHA), to assist in the sale of the EPA BMR. BAAHA is involved with conducting all BMR application screening, lottery, and sales activities. If you have any additional questions related to the sale of this EPA BMR, please contact BAAHA (www.myhomegateway.org) by email at info@myhomegateway.com.
The property may not be purchased as a rental / investment property. The owner(s) of the home must be a full time resident(s) who occupy the home as their primary home.
Household Size
BAAHA will be notifying all applicants by email regarding their lottery eligibility status sometime between January 3 and January 5, 2022.
BMR Ownership Opportunity
1765 East Bayshore Road
East Palo Alto, 94303
Application Period for this BMR is closed. New applications are not being accepted. The application period closed at 5:00pm, December 30, 2021
1-Bedroom, 1-Bathroom Loft Style
950 Square Feet (Per Tax Records)
Projected sales price: $216,600
Monthly Home Owners Association Fee: $505
Once a lottery-winning applicant has secured 1st loan approval from their lender, EPACANDO and the City will conduct a thorough review and make a determination on the applicant’s Program eligibility based on the eligibility requirements outlined above. The City, in conducting its review, will require the household to provide supporting documentation (for reconciliation purposes), including and not limited to copies of:
- Bank and investment/retirement account statements, to conduct their underwriting and approval process
- Prior filed and signed tax returns
- Payroll information, inclusive of W-2s, recent paycheck stubs, and verification of employment
The lottery is projected to be held January 7, 2022. Lottery has been held. For questions regarding the Lottery Application contact BAAHA by email at info@myhomegateway.com.
The Purchase Process
The household must demonstrate financial capacity to purchase the BMR. This will include:
- Buyers must have funds for approximately 3% of the purchase price (approximately $6,500). Funds will be applied for down payment and closing costs. A minimum 1% down payment is required. All funds must be in a bank, trust, retirement, or investment account (no mattress money/cash is allowed). The buyer should also have approximately $2,500 in reserve funds after they close the purchase transaction. Gifts may be provided by first and second degree relatives.
- Minimum FICO score of 640 for all borrowers involved in the purchase. Non-occupying co-signers are not allowed.
- The cost of owning the home in combination with your current monthly personal debt service cannot exceed 45% of your gross earnings.
Viewing the Property
Housing Costs and Ratio Requirements
Program Lottery Preferences
The Lottery Application period was closed on::
5:00PM, December 30, 2021
Lottery applicants will be notified by BAAHA as to whether BAAHA has determined them to be eligible for the lottery or not, and with which preferences. Applicants will have an opportunity to appeal for reconsideration. Applicants who pass the preliminary eligibility screening may participate in the lottery. However, the preliminary screening does not provide Program Approval for the applicant. Top-ranked lottery applicants will be required to go through a comprehensive Program approval process.
The lottery application period was closed at 5:00PM, December 30, 2021. Applications that have been Incorrectly filled out or incomplete prior to the deadline will be rejected.
Separate preference points are provided for the live and the work category. Work eligibility is based on your employer’s address, not your home address. Working at home due to COVID-19 does not fulfill the work in East Palo Alto preference requirements.
For a household to qualify for a particular preference, only one member of the household needs to meet the requirement.
BMR Purchase Workshop
Maximum Income Allowance
First Lender Approval
BMR Lottery
Applicants must meet the following eligibility requirements to purchase the EPA Below Market Rate home.