What’s BMR and who can qualify?


I have been asked many times for a question about low-income housing or BMR, such as, “What’s BMR?” or, “Who can apply?” As I have recently helped a client purchased their home under the BMR, here’s an explanation of the program, and how to prepare for the application.

BMR (Below Market Rate) is a homeownership program that provides housing to low and median income families. Therefore, there’re sets of rules such as annual income, assets, first-time home buyer, credit score, debt to income ratio, and homeowner occupancy, etc. Only a household meets those requirements will be considered for the application. The price for this kind of home doesn’t depend on the comparable sales around the neighborhood, but it depends on AMI (area median income). Due to the high demand and low supply, multiple-offer is a common situation in this kind of listing. The BMR house usually has a fixed sales price, which means no overbidding is allowed even in the multiple offer situation. This creates even more challenges to the homebuyer, as no one can offer a higher price to win over the competition. Therefore, to work with an experienced real estate professional on the BMR property is essential.

The process of the BMR purchase is also different than the regular home sale. First, the homebuyer needs to download an application packet from the city website and review the qualification requirements. Second, the buyer needs to work with a lender to get pre-qualified to purchase a home. Please note that the potential financing must meet the city’s requirement. The homebuyer will complete a mandated first-time homebuyer class. Then, work with the real estate agent to find a desirable home for sale, prepare the offer, and submit it to the listing agent. After the offer close date, the city will request a copy of the ratified contract from the seller/listing agent. If the offer is selected to move forward with the seller, the buyer will need to submit a BMR homeownership application to the city’s housing division. Be sure to include supporting documentation for income and asset verification. The city will review the application and qualification materials and determine the eligibility within 10 business days of receipt of completed application. Once it’s qualified, all adult members of the approved household must schedule an in-person consultation with city staff to discuss resale restrictions and ongoing requirements. After the interview, city staff will prepare escrow instructions and submit them to the escrow officer. Buyer will sign the appropriate documents at closing.

What’s the Difference Between Agents, Brokers, and Realtors?

Screen Shot 2018-10-03 at 2.49.56 PMAs a renter, a buyer or a seller, you’ve probably heard the words agents, brokers, and Realtors used to describe the same person who is helping you buy, rent, or sell your house or apartment. There’s even a chance you’ve used these three terms interchangeably. While an agent, a broker, and a Realtor will all help you buy or sell a home, these terms are not synonyms and do mean different things. When you’re building your real estate dream team, it’s important to know the difference between these three professionals so you can pick which one fits your needs best.

Let’s start off with “broker”: A broker usually has more extensive knowledge of real estate law in their county and state, generally has more education, and has completed more real estate classes. They must pass a difficult test to obtain a brokers license. Once a broker is licensed, they can work independently, open up their own brokerage, and hire real estate agents to work under them.

This brings us to “agents”: Agents are also real estate salespersons, but they always work under a broker. They too need to take classes and pass a real estate exam to become licensed in their state, but they generally take fewer classes than brokers.

The biggest difference between a broker and an agent is that a broker can own and run a brokerage while an agent would need to have a broker on the payroll to open up an independent brokerage.

With this in mind, you should always pick a broker because it requires more classes and an extra exam to pass, right? Not necessarily. If you’re into names and designations then choose a broker over an agent, but if you want to do what’s best for yourself then ask what real experience the agent and broker have selling homes.

So now that we’ve sorted out the difference between a broker and an agent, let’s switch gears towards realtors. You could be an agent or a broker and not be a Realtor, but to be a Realtor, you must be an agent or broker. This is because a Realtor isn’t a type of real estate salesperson but instead a designation given to members of the National Association of Realtors (NAR). Realtors can be either brokers or agents, but they also must be part of the organization, sign a strict code of ethics, as well as maintain an additional professional set of requirements.

As Realtors in California, we are bound to a code of ethics standard and have a requirement of passing the course and test every two years in order to keep our Realtor designation.

A Realtor designation means that your agent or broker has committed to keeping the buyer and/or seller’s interest in mind—not personal profit. Generally, having the designation is seen as a surefire way to enter into a more trustworthy relationship during the home buying or selling process. While searching for real estate and choosing who you work with, whether they are an agent or a broker, you should make sure that they also have the ‘Realtor’ designation.


So, next time when you have a need of making the home buying or selling decision, who should you turn to? To me, the answer is clear, a Realtor, the most important thing is finding a person who you can trust!

Your rights as a borrower


When you shop for a mortgage loan, you have certain rights that are guaranteed by the federal government’s Consumer Financial Protection Bureau.

These include the right to:

  1. Receive a credit decision that isn’t based on your race, color, religion, national origin, sex, marital status, age, or whether any of your income is from public assistance.
  2. Shop for the best loan type for you and compare the fees of different lenders.
  3. Know the total cost of your loan including the annual percentage rate (APR), points and other fees. Interest rates vary according to your credit history and credit scores, the borrowed amount and how much you’re putting as a down payment.
  4. Receive a Loan Estimate and Closing Disclosure Form before you agree to the loan and pay any fees. Compare the exact loan product you want as offered by two or more lenders.
  5. Know which fees are not refundable if you decide to cancel the loan agreement.
  6. Ask questions about loan terms and fees that you don’t understand.
  7. Know the reason if your loan was turned down.

Learn the advantages and disadvantages of each type of loan product to choose the best one for your needs. As always, consult your financial advisor before making any decision.