Grand jury examines fund
for low income home buyers
By Angela Hokanson, Bay City News Service
June 26, 2006
SAN FRANCISCO (BCN) - The 2005-2006 San Francisco civil
grand jury today offered several recommendations for improving
the efficacy of the Downpayment Assistance Loan Program, or DALP,
a fund that helps low and moderate-income residents buy homes
for the first time.
The DALP was established as a $15 million fund in 1996 through
Prop. A. The city makes interest-free down payment assistance
loans to homebuyers from the fund. The loans -- plus a percentage
of the home's appreciation -- are re-paid to the fund when the
home is sold. In this way, the fund is a kind of "evergreen"
account because money comes back in and new loans can be distributed,
according to the grand jury report.
The city of San Francisco should sponsor a new ballot measure
to increase funding for the DALP, which currently has $3.4 million
available for potential borrowers, the grand jury proposed.
The maximum sale price permitted for properties purchased through
the loan program should also be increased to bring the price guidelines
set in 2004 closer to current real estate prices, the grand jury
The grand jury report called the price guidelines for homes set
in 2004 "unrealistic in the present real estate market.''
For example, the maximum sale price for a studio or one-bedroom
property purchased with DALP funds is set at $360,000.
The guidelines for the maximum allowable property prices should
be increased by at least 15 percent to allow potential borrowers
to take advantage of the DALP funds, the grand jury proposed.
Because of the demand for assistance in buying homes, a waiting
list should be established for interested borrowers while DALP
funds are temporarily low, the grand jury recommended.
In addition, the grand jury was not able to determine whether
the mayor's office of housing has filed an annual report since
2002 with the San Francisco Board of Supervisors on the state
of the affordable housing program that was established through
Prop. A. Such an annual report was stated as a requirement when
the program was established in 1996.
The grand jury recommended that the mayor's office of housing
submit the relevant annual reports starting with the 2002-2003
Copyright © 2006 by Bay City News, Inc. -- Republication,
Rebroadcast or any other Reuse without the express written consent
of Bay City News, Inc. is prohibited.