If you’re thinking about buying a home in San Francisco, but the thought of a 20% down payment is keeping you awake at night, you might consider an FHA loan. The Federal Housing Administration, (or FHA, which is part of HUD), backs these loans so that your lender can give you a better deal (and a low down payment).

The loans are good up to $729,000, which actually goes quite a long way in the city these days. You can get in with as little as 3.5% down, and closing costs and fees can be rolled into the loan. Another thing to note about FHA loans is that they are good options for people with less than perfect credit.

Single family homes and condos can both qualify, and there is even a special loan for fixers that will help with the construction costs.  There is an official list of 23 approved condo developments in San Francisco, among them:

• Soma Grand @ 1160 Mission
• Esprit Park @900 Minnesota
• The Arterra @ 300 Berry

For the full list go here. 

Although there are no longer FHA spot checks, individual condos not on the list can be approved (according to my source at Wells Fargo) through a process called Direct Endorsement Lender Review and Approval Process, or DELRAP, with only a 5 to 7 day turnaround. DELRAP is a review of the project in its entirety, as well as the individual unit being financed. There are some restrictions, but the process for getting an FHA loan on a condo is actually pretty straightforward.

If you are a first-time buyer, an FHA loan – along with the first time buyer tax credit, low interest rates and reasonable prices on homes right now – might give you just the opportunity you need to be a home owner in San Francisco!

If you would like to know more about FHA loans, I have excellent resources and would be happy to connect you with an expert who can get you pre-qualified.  You can reach me at llanzone@mcguire.com.