The Supplemental Home Loan Program (SHLP)

In addition to the Mortgage Origination Program (MOP), there are the Supplemental Home Loan Program (SHLP) and the Centrally-Funded Supplemental Home Loan Program (CF-SHLP) which can reduce the amount of cash a borrower needs to cover the down payment. While the supplemental program reduces the funds needed at the time of purchase, the SHLP is a second mortgage and increases the borrower's monthly mortgage payment over the life of the second loan. 

The SHLP program is designed to assist junior faculty in the purchase of a first home by decreasing the down payment required for the home purchase. These are faculty candidates who may be able to afford a higher monthly mortgage payment with their new appointment but do not have the resources available for the 10% down payment. 

While the MOP has a 90% loan-to-value-ratio, adding a second SHLP loan in conjunction to the MOP may result in a combined loan-to-value ratio (CLTV) of 95%, reducing the required cash down payment to 5.0% of the purchase price. The amount the down payment is reduced depends on the size of the SHLP loan and the amount of the total financing.

 

Loan-to-Value Thresholds for MOP and SHLP Loans

Combined Loan Amount
MOP LTV
SHLP CLTV
Less than or equal to $1,790,000
90.0%
95%
Greater than $1,790,000*
80.0%
90.0%

*MOP loans above $1.79 million require approval of the University President, Chair of the Board of Regents, and Chairs of the Committees on Finance and Compensation and are not supported by the San Francisco campus. Campus SHLP loans may be added to the maximum MOP loan of $1.79 million for combined financing exceeding $1.79 million. Under that scenario, the loan-to-value ratio is not reduced and there is no down payment reduction benefit.

Example:  A recruit has been a student for many years and does not have a lot saved for a down payment.  However, they are getting a new faculty position at UC and will have enough income to cover a first and second mortgage.  They find a home for $1 million, but do not have the $100,000 for the down payment.  They could borrow $50,000 from the department using the Supplemental Home Loan Program, and contribute the other $50,000 from their own pocket.  The MOP loan covers the first 90% of the purchase price, they are contributing 5% using their own savings, and borrowing an additional 5% to cover the rest.  (This does not consider the additional funds needed to cover closing costs, real estate taxes, insurance, or reserves.)

The standard structure for a campus SHLP is $75,000 at 3.25% fixed interest for a period of 15 years; this results in an additional monthly payment of about $527. The UCSF MOP loan limit is $1.79 million.** In order to benefit from the reduced down payment, combined financing must be below $1.79 million. Financing may be estimated using the UC MOP Loan Calculator. The monthly SHLP payments (depending on the amount, rate, and term supported by the department) can be estimated using any number of online mortgage calculators, such as this one at Bankrate.com. 

SHLP loans are uncommon, and are related to specific recruitments for which funds have been set aside for this purpose. MOP loans are funded by the University (systemwide) while SHLP loans are funded by the department (or in some cases by the school).

As the funding agency, departments may set their own terms for Supplemental Home Loan Program Loans  as long as they meet program requirements.  SHLP rates may never be set below the MOP rate (the minimum MOP rate is 3.25%), term may not exceed 30 years, and amount may not exceed $1.79 million.

If a department would like to support participation in the SHLP program as well as the MOP program, a funding source (COA) must be identified on the MOP/SHLP Allocation Request Form when the MOP request is submitted to the dean's office. 

SHLP loans are requested in conjunction with MOP loans (they are supplemental to the MOP) and the eligibility and qualifying criteria for SHLP loans are the same as MOP loans.

UCSF-Specific Requirements and Procedures for the Supplemental Home Loan Program (SHLP) PDF

 

The Centrally-Funded Supplemental Home Loan Program (CF-SHLP)

In 2016, the Office of Loan Programs announced limited support for a Centrally-Funded Supplemental Home Loan Program (CF-SHLP). This is to assist departments who do not have the resources to fund individual SHLP loans. The SHLP and CF-SHLP do not benefit everyone, but can provide essential assistance to those borrowing less than the maximum under the MOP program and need like to borrow additional funds to cover part of the down payment. Candidates and recruiters should discuss this option during recruitment as it may enable a home purchase. Departments and candidates are free to contact Home Loan Program Manager Wilson Hardcastle to see if this program is right for them.

Access to these funds can be requested by the department and dean's offices by indicating their intent and approval on the MOP/SHLP Allocation Request Form. Allocation reservations will be reserved on a first come, first serve basis. Currently, the campus is over-committed on its CF-SHLP allocation, and requests for a centrally-funded SHLP may not be possible until a new round of funding is provided by UCOP.

As with standard SHLP loans, CF-SHLP loans must be in the second position and may only be associated with a purchase transaction.  Property and candidate eligibility criteria remain the same as the existing MOP and SHLP programs.  The SHLP and the CF-SHLP cannot be combined.

CF-SHLP Parameters:

  • The maximum CF-SHLP loan amount is $75,000 or 5.0% of the purchase price, whichever is lower.
  • The CF-SHLP maximum loan term is 15 years.
  • The CF-SHLP rate is equal to the MOP rate index plus 0.25% servicing fee. The minimum rate is 2.75%.

 

 

*The maximum loan amount is now indexed to any increase in the annual median sales price of existing homes in California for the prior calendar year, as published by the California Association of Realtors in their December Home Sales and Price Report.

 

Note: This page may be bookmarked or forwarded as http://tiny.ucsf.edu/shlp.

Questions regarding the Supplemental Home Loan Programs may be directed to Wilson Hardcastle, 415-476-2016.