BELOW MARKET PURCHASE (BMP) PROGRAM
ELIGIBILITY REQUIREMENTS AND PURCHASE PROCESS
Program Overview
The City of Santa is offering first time homebuyers an opportunity to purchase newly constructed homes in
various developments within the City of Santa Clara through its Below Market Purchase (BMP) Program. The
City of Santa Clara has partnered with Housing Trust Silicon Valley (HTSV) to assist in the administration of this
program and in facilitating the buyer selection process.
The BMP Program offers new condominiums, single family and townhouse style homes for sale at lower than
market rate price for low to moderate-income households. A BMP home is subject to a 20-year City loan,
secured by a Promissory Note, Deed of Trust and Security Agreement, and the BMP Covenants, Restrictions,
and Option to Purchase which are recorded upon the initial sale of the property. The 20-year City loan is the
principal amount of the Promissory Note. The principal amount of the Promissory Note is the difference
between the appraised unrestricted Initial Market Value (IMV) of the home and the restricted Affordable
Sales Price (ASP) when the BMP home is initially sold. For homes to remain affordable, a home purchased
through the BMP Program carries the following resale restrictions for a twenty (20) year term.
Year 1 through 5 of ownership: A BMP homeowner who decides to sell their home must sell at a restricted
sales price to an eligible homebuyer as defined by the resale restrictions. The principal amount of the BMP Promissory
Note is forgiven and another principal amount is established for the new owner. Equity share is capped.
Year 6 through 20 of ownership: A BMP homeowner can resell their home to whomever they choose at the
current, unrestricted fair-market price. The BMP homeowner will pay off the principal amount of the BMP Promissory
Note at the sale of the home. The BMP homeowner shall pay a share of the increase in equity in the home to the City.
After the 20th year of ownership: Resale restrictions expire. The homeowner is required to pay back the
outstanding principal of the BMP Promissory Note. The homeowner is able to realize all of the market-driven appreciation
in the home above its initial market value. No equity share to the City is required.
EQUITY SHARE EXAMPLE
For this example assume a Principal amount of City Note
$115,000
Assumed Unrestricted Resale Price
Less capital improvements approved by City
Net Unrestricted Resale Price
Less Initial Market Value (at time of Original Purchase)
(BMP Sales price=$500,000-115,000= $385,000)
Appreciation Amount
City's Equity Share (20-6)/20 times the Appreciation Amount or 70%
Seller's Equity (Appreciation Amount less City's Share)
(Seller gets 5%/yr increase in shared Appreciation Amount)
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$600,000
- 5,000
= $595,000
-$500,000
= $95,000
($66,500)
$28,500
Rev.2 06/16
OR (Interest Calculation on BMP Note)
Appreciation Amount
7% simple interest on BMP Note ($115,000 principal)
Seller's Equity (Appreciation Amount less City's Interest)
$95,000
($48,300)
$46,700
Eligibility Requirements
 Be a first-time home buyer as described by the City of Santa Clara BMP program guidelines, as
amended;
 Gross Household income cannot exceed 120% of the Area Median Income (AMI), adjusted for
household size – see table below;
Maximum Household Incomes as determined by the State of California’s Housing & Community Development Department.
2015
120% AMI
1
$89,950
2
$102,800
3
$115,650
4
$128,500
5
$138,800
6
$149,050
 Must qualify for a first mortgage with a thirty-year, fixed-rate conventional loan.
 Credit-Minimum FICO is 640 (middle score)
o No short sales or bankruptcy within the last 4 years
o No foreclosures within the last 7 years
 Must have less than $100,000 in financial assets (excluding retirement assets).
 Attend a City of Santa Clara BMP Orientation & Application Workshop hosted by Housing Trust
Silicon Valley.
 Attend a HUD Approved 8-Hour Homebuyer Education Class through Project Sentinel and obtain a
Homebuyer Education Completion Certificate.
 Minimum 3% down payment required from borrower. Additional down payment may be required.
Most BMP lenders require at least 5% down payment from the borrowers. Currently there is no
down payment assistance available.
 Must have funds for closing costs and prepaid items. Lenders may require additional reserves.
Steps
1. Complete a Pre-Qualification Intake Questionnaire with Housing Trust Silicon Valley staff
2. Attend a BMP Orientation & Application Workshop held by Housing Trust Silicon Valley
 For applicants who have not attended this workshop and submit an application, a workshop
may be arranged during HTSV business hours at its convenience.
 A Household’s application cannot receive eligibility approval until the completion of this
workshop.
 An applicant household who has not completed this workshop or the 8 Hour Homebuyer
Education class will not have first come, first serve status for developments with this
designation and will be on a waiting list until all requirements are met.
3. Register and attend an 8-hour Homebuyer Education Class from an approved HUD Certified agency
 Applicants/co-applicants is defined as household members who will be on title, first mortgage
loan and/or non-borrowing spouses.
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
A Homebuyer Education Certificate is valid for up to 2 years from its issuance at the date of
accepted eligibility application.
 Applicants who have not attended an 8-hour Homebuyer Education Class and are submitting
an application must submit a copy of the registration confirmation from approved HUD
certified agency for a workshop date within 21 days of the application submission date.
 The approved HUD Certified agency for the 8 Hour Homebuyer Education Class is Project
Sentinel. You can contact Project Sentinel by phone (408)720-9888 or email at
[email protected] . Its website address is www.housing.org .
4. Preview the Available Properties and Development
5. Determine Eligibility, Obtain Prequalification/Pre-approval from Approved BMP Lender, and
Complete BMP Eligibility Application
6. Housing Trust reviews application for preliminary eligibility
 The applicant’s priority level will be determined as follows:
o 1st Priority Level- At least one household member* who both lives within the City
Limits of the City of Santa Clara and operates a business or is employed by a business
or a public or quasi-public agency in Santa Clara
o 2nd Priority Level- Household lives with the City Limits of the City of Santa Clara
o 3rd Priority Level- At least one household member operates a business or is employed
by a business or a public or quasi-public agency in the City of Santa Clara
o 4th Priority Level- Any other qualified applicant household without regard to residency
or employment
*The qualifying household member must be the person or a dependent of a person whose name will appear on title and
who will live in the unit as their primary residence
 Eligible applicants must maintain their eligibility until a BMP home is available.
o
o
o
Income and asset information received at application are valid up to 90 days from the
issue of the Eligibility letter.
After 90 days, income, asset and residency documentation will be outdated.
It is the applicants’ responsibility to maintain their eligibility by submitting updated
documentation.
Housing Trust Silicon Valley and/or the City of Santa Clara may change program or selection process at their sole discretion
at any time without notice. An Applicant submitting an eligibility application containing misrepresentations or
falsifications will be subject to immediate disqualification from the Below Market Purchase (BMP) program for the City of
Santa Clara.
7. Pre-Approval and Mortgage Eligibility
 Down payment assistance is not specifically available for new construction BMP homes in
Santa Clara at this time. Borrowers may be required to bring in 5% or more for down
payment.
 FHA loan guidelines are not compatible with the BMP program.
 Applicants with a pre-approval application from a non-approved lender cannot submit an
Eligibility Application until the non-approved lender seeks approval from BMP administrator
and the City first.
8. Final Program and Mortgage Eligibility Review
 Applicant will then be matched with a BMP home when it becomes available.
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Rev.2 06/16
9. Selection of BMP Home
 Eligible applicants selected from the highest priority level will have the first opportunity to
purchase the assigned home.
 Selected eligible applicants are responsible for setting a viewing and purchase contract
appointment within 3-5 days of confirmation with the Developer’s sales staff.
 As homes become available, they will be matched first to Program eligible applicant ranked in the
Highest Priority Level and by Household Size per the number of bedrooms in the home as determined by
the Occupancy Standards. Builder upgrades to the home will not be permitted. The Builder will
choose all exterior design features and homes are sold on an as-is-basis.

Any previously selected applicants choosing to pass on their second opportunity to purchase a
home will lose any priority level ranking and have their application moved to the end of the list
of eligible applicants for this project.
Lottery Policy
 A lottery is held when more than one Eligible Household with the same Priority Level ranking exists.
 Eligible applicants will be notified a lottery for their priority level exists and given the date the lottery
will be held.
 HTSV will privately conduct the lottery to select a homebuyer.
o Several HTSV staff members and occasionally a representative from the City of Santa Clara is
present at the drawing
 Selected applicants may pass only once on an assigned home within the development without losing
their priority level ranking unless eligibility is not maintained.
10. Purchase Contract and Sale Application
 The Purchase contract, related disclosures and real estate documents for the home are signed
with the Developer’s sales staff.
 A deposit check for 5% of the purchase price (if applicable) will be collected from the applicant
at the signing of the purchase contract.
 A BMP Purchase Application is completed by the selected eligible applicant and submitted to
lender.
o A $500 non-refundable purchase application fee from the applicant made payable to
Housing Trust Silicon Valley will be due upon receipt of the BMP Purchase Application
package from the lender.
11. In Person Review of BMP Loan Documents, Disclosures and BMP Acknowledgment
 Buyers will also review and sign the BMP Promissory Note, Deed of Trust and Security
Agreement, BMP Covenants, Restrictions and Option to Purchase, and BMP disclosures.
 Buyers are required to take a BMP test acknowledging their understanding of the BMP
program.
12. Loan Approval
 Lender will submit your complete loan application to their mortgage underwriter for final
approval of your first home mortgage loan.
 Your lender may require supplying updated income and asset documentation from all
borrowers in your household as necessary by deadline.
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Rev.2 06/16
13. City of Santa Clara Review and Approval
 The Housing and Community Services Division reviews your signed BMP documents and
application file for approval by designated City of Santa Clara staff. Documents are then
forwarded to the title company.
14. Close of Escrow
 The Escrow Officer for the Title Company will coordinate an appointment with you to sign the
escrow and loan documents for the first mortgage.
 You will deposit the funds needed for any remaining balance of the purchase of the home and
any associated closing costs. All funds prior to close of escrow must be in the form of a
cashier’s check and or wire.
 After signing the loan documents, the documents are returned to the lender for review and
funding approval.
 Upon verification of funding and recording, ownership of the home is transferred from the
builder to the buyer(s).
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Occupancy Standards
To determine the size of BMP home (number of bedrooms) an Applicant may be eligible to purchase,
the number of people in his/her household, and their age, gender and familial relationships (siblings,
couples/spouses, parent, child, etc.) are considered.
The maximum occupancy allowed in a BMP home is two people per bedroom, plus one additional
person. The minimum allowed is no less than one person per bedroom, however couples and/or
household members (particularly young siblings) of similar age and same gender may be required to
share a bedroom. Reasonable accommodations to these standards may be requested in the case of
medical or disability needs, and will be considered on a case-by-case basis.
Number of Bedrooms in BMP
Home
One
Two
Three
Four
Five
Minimum Household Size
Maximum Household Size
1
2
3
4
5
3
5
7
9
11
Some households may qualify for a range of bedroom sizes (e.g., a 3-person household may qualify for a 1-, 2or 3-bedroom home), depending on specific household characteristics, and may choose to buy whichever sized
home they prefer, among those for which they qualify, assuming they can afford the home’s price. Program staff
will review household composition details provided in Eligibility Applications and notify Applicants in their
initial Eligibility Determination letter what home sizes they are eligible to buy.
If Applicant’s household size and/or composition changes between date of Eligibility Application and date of
Application to Purchase (according to information provided in Applications), Applicant may be determined to
qualify for a different home size(s) than that stated in initial Eligibility Determination Letter.
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