Occupancy and maintenance

• The home needs to be owner-occupied. This means you need to live in the home. You can’t live somewhere else and rent it out.
• You cannot lease or rent any part of the home.
• You need to maintain the home according to the City Code and Owners Association Guidelines.
• You need to verify your insurance, property tax payments, and occupancy with the City every year.

Affordability restrictions

• The home must stay as an affordable unit for the duration of the affordability agreement, 45 years. If it’s sold, the price is determined by the City.
• The City has the first option to buy the home if you want to sell it.
• If the home is resold, the new buyer will have to sign a new affordability agreement.

If you are selected to purchase a BMR home, you’ll need to meet specific criteria.

Household size and income

Your household size needs to match the number of bedrooms, with a minimum of 1 person per bedroom. There should not be more bedrooms than people.

You need to meet the Area Median Income (AMI) level for the home [click here] and provide documentation proving your income.

Down payment

You’ll need to pay a minimum of 5% for a down payment and 3% of it needs to be from your own funds. Your down payment funds must be in your bank account for at least 3 months.

Housing cost ratio

The ratio of your income to the Housing Cost Ratio, which includes principle, interest, taxes, insurance, and homeowners association fees must be between 28%-42%. This will be calculated by the City.

Below Market Rate (BMR) homes may be sold, and the City will work with you throughout the process. In some cases, the City may purchase your unit directly, or you may receive approval to sell it to an income-eligible buyer.

Because the sale of a BMR home can take time, we encourage you to contact the City as soon as you begin considering selling. Please wait to engage a real estate agent until you have received City approval to move forward.

Sales Price 

The below market rate unit may not be sold more than the Maximum Restricted Sale Price, which is calculated by the City. Any excess sale proceeds are paid to the City.  

There is an associated 2.5% transaction fee of the sale prices due to BAAHA from the seller. 

The below are general steps in the selling process. A more detailed list will be sent to the seller and realtor. 

Get approval to sell 

1. Email staff at housing@walnut-creek.org with your intent to sell.
2. Staff will provide you the maximum restricted sale price for the home.
3. Fill out Exhibit C - Notice of Intent to Sell or Transfer form and email to housing@walnut-creek.org.
4. Obtain a pest control report.
5. Contact the City for a home inspection.
6. The City has up to 30 days to respond to your intent to sell or transfer the home. The City will notify you if the City intends to exercise its right to purchase your unit or if you may sell the unit to an eligible buyer.

Placing a home on the market

1. After you receive approval to sell your home, you may hire a realtor. The City requires the buyer and the seller to be represented by an agent.
2. Send any marketing and listing material for the home to the City for approval.
3. With City approval, the realtor may post the listing on MLS. The City requires the MLS to be listed for a minimum of three weeks and at least 1 open house.
4. The realtor will advise all potential buyers to fill out the pre-application. 
5. A random drawing will take place to select the buyer. 
6. The selected buyer will be notified. The selected buyer must complete the full application and the Buyer’s Disclosure Statement.
7. The City will review the full application and confirm final eligibility.
8. Upon City approval, the City will prepare the program documents, several of which will need to be executed, notarized, and recorded at closing. The appropriate Title Company contact information should be provided to the City. The City will be the final signatory for all documents.

Any structural changes to your home that increases its value over $2,000 must be pre-approved by the City.  

To get approval for home improvements: 

1. Complete Improvement Request form 

You need to have sufficient creditworthiness to qualify for a mortgage by a lender. This might include:

• Not having filed bankruptcy in the last three years
• Minimum credit (FICO) score

The City does not allow for co-signing, but may under special circumstances.
A gift of funds is allowed to help you purchase the home. For example, a family member can give you money to use for the down payment.

The debt to income ratio requirement will be determined by the lender.

Mortgage Lenders

You’ll need to select and contact a mortgage lender to begin the loan qualification process. You will need to work with your chosen lender and your own real estate agent during the purchase process.  The following is a list of participating lenders who are familiar with the City’s BMR process.  You may also choose a lender other than those on this list, including those recommended by the California Housing Finance Agency for similar BMR programs:  https://www.calhfa.ca.gov/apps/approvedlenders/. 

The City does not endorse, recommend or require the use of any particular mortgage lender. 

Refinancing

For refinancing questions, please email staff at housing@walnut-creek.org.