SAN FRANCISCO—San Francisco FCU has introduced a new mortgage it said it aimed at San Franciscans struggling with Bay Area housing prices.
The “POPPYLOAN” mortgage offers up to 100% home financing with the possibility of zero down payment required for credit union members seeking to buy a new home.
“POPPYLOAN was created in response to skyrocketing home prices throughout the San Francisco Bay Area,” SFFCU said in a statement. “Many San Franciscans are paying more than the average mortgage payment in rent every month, but they cannot buy a home because they cannot save enough for the 20% down payment required for a conventional mortgage. To help fellow San Franciscans make their dream home a reality, San Francisco Federal Credit Union created the Proud Ownership Purchase Program for You – POPPYLOAN.”
The new loan is available to anyone who works in San Francisco or San Mateo Counties and can be used to purchase a home anywhere in the nine Bay Area Counties: San Francisco, San Mateo, Marin, Napa, Sonoma, Santa Clara, Alameda, Contra Costa, or Solano. Qualified borrowers can finance up to 100% of the purchase price of a home, up to $2 million. There is no added requirement for private mortgage insurance, according to SFFCU.
"We see POPPYLOAN as a game-changer for the San Francisco real estate market," said Rebecca Reynolds Lytle, SFFCU’s SVP and CLO, in a statement. "Too many of our members have given up hope of buying a home because of escalating home prices and the required down payment. However, these same families are paying more than a mortgage payment for monthly rent. Paying $3,600 for a one-bedroom apartment is about the same as making a monthly payment on an $800,000 mortgage. We created POPPYLOAN to help middle class families realize their dream of buying a home without having to move out of the Bay Area."
To qualify for POPPYLOAN, borrowers must be 18 years or older and purchasing a single family home, townhouse, condominium, or two-to-four unit multi-family dwelling as their primary residence. POPPYLOAN is structured as a 5/5 adjustable rate, 30-year mortgage. Interest rates and monthly payments are fixed for the first five years and every five years thereafter, with no more than a 2% increase every five years and no more than a 6% increase over the life of the loan. POPPYLOAN is not available for refinancing an existing mortgage.
"The rising cost of real estate is creating a housing crisis in San Francisco, and while POPPYLOAN isn't a solution for everybody, we want to do what we can for our friends and neighbors," said Steven Stapp, president and CEO of San Francisco Federal Credit Union, in a statement. "We studied the problem and realized that there was no reason our credit union couldn't offer up to 100% financing without requiring PMI. Other credit unions have had success with similar programs and we built POPPYLOAN as the best possible solution we could offer to our members."