Condominiums in publicly subsidized buildings that were constructed for low-income residents are being marketed to wealthier homebuyers in a bid to boost sales.
Purchasing rules that govern scores of San Francisco Redevelopment Agency condos are being relaxed to help sell the units in a battered real estate market.
“We’ve never had this much inventory on the market,” Redevelopment Agency Executive Director Fred Blackwell said.
Agency commissioners this week raised the income cap for buyers to qualify for some of the units at Mission Walk — a 131-unit, two-building project completed on Mission Bay’s Berry Street in July — from those earning 100 percent of The City’s median income to those earning 120 percent.
A two-person household earning up to $77,450 originally qualified to buy a two-unit Mission Walk home for roughly $210,000.
Such households continue to qualify for the homes, but two-person households earning up to $92,900 also now qualify for the same units.
Lower-priced units set aside for lower-income earners are not affected by the change.
When owners of the below-market-rate condos eventually sell their units, Redevelopment Agency rules force them to sell to buyers with a similar income level at a similarly restricted price.
The agency is struggling to sell the units because few homebuyers are qualifying for loans and because of a flood of foreclosures across the real estate market, according to Blackwell.
“The price points, when you look at foreclosures and look at our units, are pretty much the same,” he said. “What people are doing, it seems, is choosing to go with the foreclosures because the foreclosures don’t have the same kind of income restrictions or equity restrictions.”
Buying rules for homes in the 18-unit Bay Oaks project at 4800 Third St. in the Bayview district were amended in the same manner in mid-February.
Redevelopment Agency staff are preparing to ask commissioners to approve similar changes for Armstrong Townhouses, a 125-unit project at nearby 5600 Third St., according to Housing Director Olson Lee.
The agency may offer down-payment assistance to low-income buyers at both Bayview projects, but not Mission Walk, Lee said.
Applicants for Mission Walk homes whose incomes narrowly exceeded the buying rules will be contacted and asked if they are still interested, according to Kim Nash, project manager for developer Bridge Housing Corp.
“Then we’ll be starting to advertise more broadly at the higher income levels,” Nash said.
Qualifying to buy a home
Redevelopment Agency rules for buying below-market-rate units:
- Purchaser cannot have owned a home in the past three years
- Down payments are required
- Purchaser must qualify for a 30-year, fixed-rate, fully amortizing mortgage