New program offers up to $40,000 in down payment assistance to San Diegans of color

The San Diego Housing Commission launched a pilot program Thursday aimed at helping moderate-income households of color achieve home ownership in San Diego. It offers homebuyers up to $40,000 in grants and deferred loans to assist with down payments.

The program has funding to assist 80-100 homebuyers, said Sujata Raman, the commission’s vice president of single-family housing finance. It won’t close the city’s racial gap in home ownership, she said. But she called the program a historic step forward.

“Every little bit helps,” Raman said. “This is the first of its kind in San Diego, where we have a race-conscious program through a government agency.”

Non-Asian households of color in San Diego have lower homeownership rates than average. Less than a third of Black households own, compared to more than 60% of white households. Over the past decade, the rates of home ownership fell slightly for the county’s Black, Native American, Native Hawaiian and Pacific Islander residents according to U.S. Census data.

Racist practices in housing and lending created this gap.

From its founding in the 1930s until the Fair Housing Act of 1968, the Federal Housing Authority denied mortgage insurance to people of color, while providing massive subsidies for new home sales almost exclusively to white buyers. These deeds often included racial covenants, which restricted any subsequent sale of the home to white buyers.

Ryan Clumpner, vice chair of the housing commission’s board, looks at homeownership as a key piece of the larger gap in racial wealth.

“Homeownership brings with it the opportunity to establish generational wealth,” he said. “That has positive impacts on families for years to come.”

To qualify, a household of color must:

• Earn between 80% and 150% of the San Diego area’s median income (see chart below)
• Have a minimum middle credit score of 640
• Have a maximum monthly debt-to-income ratio of 50%
• Put forward at least 1.5% of the purchase price as a down payment
• Have not owned a home in the last three years

San Diego Housing Commission

The funds are first-come, first-serve, and the Housing Commission’s Raman said they’ve already received many inquiries.

Recently, the state’s much larger first-time home buying assistance program ran out of funds within two weeks.

The commission has not yet launched an assistance phone number for the program. Raman said the first step is to contact one of its approved lenders.

Click here to view program requirements.

Click here to view a list of approved lenders.