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The Lottery Winners

Ariel Mendez-Peñate and Patricia Cotter


Buyers: Ariel Mendez-Peñate and Patricia Cotter
Bought: 2-bed, 1-bath condo in Hayes Valley
Asking: $313K 
Final: $313K

Ariel Mendez-Peñate and Patricia Cotter still have the little red lottery ticket that changed their lives. “It literally looks like a raffle ticket you would get from a fair,” says Mendez-Peñate, who is considering framing it and hanging it up in their new twobedroom Hayes Valley condo. The couple are both teachers, with a young daughter and a son on the way. They learned about San Francisco’s below-marketrate (BMR) program at an affordable housing fair. People whose income falls at or below a predetermined percentage of the area median income (AMI) for the city can apply to purchase one of a limited number of homes at up to 75 percent below market rate. Between July 2016 and July 2017, the city facilitated the purchase of 185 BMR units, from studios to three-bedrooms, priced between $158,000 and $520,000.

“They were very honest that your chances are very, very slim,” Mendez-Peñate says. “They tell you that people have applied 19 times and never gotten anything.” But the odds were worth it to the couple, who wanted to raise their family in the city and both had jobs they loved. Together they were making nearly $100,000 per year, which for their family of three put them at 98 percent of AMI. (There are units available for people making up to 140 percent of AMI—$113,000 for a single earner, $161,400 for a family of four—although the greatest number of units are for people and families that fall between 70 and 100 percent of AMI.) “We knew we wanted to stay in the city and the BMR program was our golden ticket,” Mendez- Peñate says. “There is no secret uncle we don’t know about who is going to leave us a fortune.”

Before they could apply for available units, they had to attend a six-hour homeownership workshop and complete a two-hour private counseling session. Then they had to get preapproved for a loan through one of the local lenders that offer funds for BMRs (they went with Umpqua Bank). The loan, a standard 30-year mortgage with a fixed rate, required that they put only 5 percent down. Then they started watching the listings on the Mayor’s Office of Housing and Community Development website. They saw one home that looked like a good fit in August 2016—a two-bedroom in a brand-new building in Hayes Valley. They applied without ever seeing the unit in person, and, to their eternal surprise, their number came up.

They were seventh on the list for four available BMR units in the building. Because potential buyers are sometimes disqualified or drop out, their home-buying counselor advised them, “Hold tight, you’ve got a good chance of being called back.” Several anxious days later, they got the email they had been waiting for. The couple ended up paying $312,778 for their new two-bedroom condo. Identical units in the building sold at market rate for $965,000. Their down payment was less than $16,000, and their mortgage payment is $1,500. Says Mendez-Peñate, “It’s made our dream of staying in the city a reality.”

The Family Business
Broker, Lawyer, Designer, Mom
To the Locals Go the Spoils
Tell a Story, and Make It Good
The Lottery Winners
Riding Out the Recession
The Soul (and House) Mates
Three Boys and a Dream
Not in Texas Anymore
A Reward for the Faithful
A Gift from Grandma
The Grateful Educators
Chasing the Dream
The Renter No Longer
The Data Optimizers
An Accidental Homeowner
The “Oh-S**t” Moment
All Aboard in the Marina


Originally published in the November issue of San Francisco

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