San Francisco Federal Credit Union assumes you have the credit worthiness for 100 percent financing up to $2 million with no money down if you can afford to live in San Francisco. So a 100 percent financing program offering loans up to a $2 million under the credit union’s new POPPYLOAN (Proud Ownership Purchase Program for You) program is a no brainer.

Rebecca Reynolds Lytle, San Francisco FCU Senior VP told Diana Olick from CNBC, “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,” 

According Diana Olick at CNBC, how someone qualifies for the 100 percent financing program:

“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. PMI 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.”

Unlike subprime loans in the past, San Francisco FCU is adding the extra safeguard by qualifying people for the loan by calculating the payment today and with an estimate of what the payment would be under the next rate change. By federal the interest rate can only increase by a maximum of 2% at every rate change. 

POPPYLOANs are nothing like the old no-down payment, no-doc loans that caused the housing crash. Borrowers are fully vetted, income and assets verified are verified by underwriters. Lytle told CNBC, “We’ve always done very conservative lending. Our philosophy is you lend to the person, you have to understand their situation and verify what they’re telling you,” 

Real Estate prices in San Francisco are some of the most expensive in the world with monthly rental prices being equally as high. The median San Francisco home price was $1,110,000 in October, an increase of 11 percent from one year ago and are five times the median value nationally. 

On average, San Franciscans pay 47-50% of their income for rent. 

After announcing the program earlier in the week, San Francisco FCU was flooded with email inquiries about the program. Lytle told CNBC, “What we would pay here for a down payment you could take to another market and pay cash for a house,” 

San Francisco’s home values have soared in the last decade, thanks to the tech industry. Like Miami which has seen a massive growth in high rise living, San Francisco has very little room for additional construction in the city, competition for housing is fierce.