How it works
SDHC operates two DPA tiers for City of San Diego first-time buyers. The Low-Income tier (≤80% AMI) offers up to 19% of purchase price as a silent deferred second with a $10,000 closing-cost grant — spectacular when funded, but intake was reportedly paused / waitlist-only as of Q1 2026 pending new funding. The Middle-Income tier (80-150% AMI) offers a flat $40,000 deferred loan plus $10,000 closing-cost grant and remains active.
Low-income tier accrues 3% simple interest. This is not a 0% silent second — at payoff, accrued interest can be material. On a $100K low-income deferred second held 30 years, interest accrues to roughly $90K.
Geographic coverage is strict: City of San Diego only. Unincorporated San Diego County (El Cajon, Santee, Spring Valley, La Mesa, Lemon Grove, etc.) routes to San Diego County DCCA, not SDHC. Verify the specific address before writing an offer.
Who it's for
City of San Diego first-time buyers. Middle-income tier (80-150% AMI) is the currently-usable product; low-income tier is funding-constrained.
Eligibility at a glance
- First-time buyer?
- Yes
- FTB definition
- Has not owned in past 3 years.
- Minimum FICO
- 640
- Income limit
- Low-income tier: ≤80% San Diego-area AMI. Middle-income tier: 80-150% AMI — generous ceiling.
- Homebuyer education
- SDHC-approved course required.
- Minimum borrower contribution
- 3% of purchase price from borrower's own funds (low-income tier).
Repayment terms
Silent second mortgage. Low-income tier accrues 3% simple interest, deferred. Middle-income tier deferred with similar terms.
Term
30 years
Interest
3.00%
Due at
Sale, refinance, or end of owner-occupancy
Property rules
- Eligible property types
- Single-family residence, Condo, Townhome
- Maximum purchase price
- City of San Diego annual sales-price limit.
- Owner-occupancy required
- 30 years
Layering & first mortgage options
How to apply
Process: Through SDHC-approved participating lenders.
Funding cycle: Middle-income tier (80-150% AMI): active. Low-income tier: intake reportedly paused / waitlist-only as of Q1 2026 pending new funding. Confirm status with SDHC at (619) 578-7788 before steering a client.
Typical timeline: 45-60 days.
Things that trip borrowers up
- 3% simple interest accrues on the low-income deferred second — over 30 years on $100K, that's ~$90K of interest at payoff. Disclose honestly.
- Only SDHC-approved lenders can originate — verify broker channel participation.
- 'City of San Diego 3% Down Program' is the colloquial name for the SDHC Low-Income tier (3% borrower contribution). Not a standalone product.