If San Franciscans can afford the city's skyrocketing rents, then they can afford the monthly payment on a $2 million mortgage. That is the logic behind a new offering from the San Francisco Federal Credit Union: Its new "POPPYLOAN" (Proud Ownership Purchase Program for You).
"We have programs to help low-income people, but for the vast majority of young professionals, there is no hope or no help for this middle-class band in San Francisco," said Rebecca Reynolds Lytle, the credit union's senior vice president and chief lending officer.The nonprofit credit union has 34,000 members.
To qualify for the loan, which requires no down payment, borrowers must work in San Francisco or nearby San Mateo County. The loan must be used for the purchase of a primary residence and cannot be used for a refinance. Private mortgage insurance is not required. The loan is a 5/5 adjustable-rate product, which means it can only adjust at five-year intervals. This is atypical of most adjustable-rate loans, which usually change annually after the initial lock period. This loan can only increase by 2 percentage points each time, up to 6 percentage points over the life of the loan.