Selling Your DALP Home — The Resale Guide

By Dulmaa Bor – San Francisco City-Certified Realtor 🏡

So you bought your San Francisco home with DALP or City Second assistance, you’ve built equity, and now it’s time to sell. Whether you’re upsizing, relocating, or simply ready for the next chapter, understanding the resale process is crucial to a smooth transaction.

As a City-Certified Realtor with 12+ years of experience helping 30+ families navigate MOHCD programs—both buying AND selling—I can tell you: the resale process is straightforward when you know what to expect. But it’s different from selling a traditional home, and working with a qualified, certified agent makes all the difference.

Let me walk you through exactly what happens when you sell a DALP-restricted property.

Understanding Your DALP Loan Payoff 💡

When you purchased with DALP or City Second, you received a “silent second” loan with zero monthly payments. Now that you’re selling, it’s important to understand how your DALP payoff works.

The Shared Appreciation Formula

Your DALP payoff amount consists of:

1. Original loan principal (what MOHCD lent you)

2. Proportionate share of appreciation

How it’s calculated:

Appreciation = Sale Price (or Appraisal) - Original Purchase Price
MOHCD's Share = (DALP Loan ÷ Purchase Price) × Total Appreciation

Real DALP Resale Example 📊

Original Purchase:

• Purchase price: $1,250,000

• DALP loan: $500,000 (40% of purchase price)

• First mortgage: $625,000

• Your down payment: $125,000

Today’s Sale:

• Sale price: $1,750,000

• Total appreciation: $500,000

• MOHCD’s 40% share: $200,000

• DALP payoff: $500,000 + $200,000 = $700,000

Estimated Proceeds:

• Sale price: $1,750,000

• Minus first mortgage: ~$625,000

• Minus DALP payoff: $700,000

• Minus closing costs (6%): $105,000

• Your net: ~$420,000

💡 You turned $125,000 into $420,000 — even after sharing appreciation!

Step-by-Step Guide to Selling Your DALP Home 📝

Selling a DALP home requires careful planning and coordination with MOHCD. Here’s the step-by-step process:

Step 1: Notify MOHCD of Your Intent to Sell

• Submit your Intent to Sell form

• Provides MOHCD time to review your file and approve next steps

Step 2: Get Your DALP Payoff Estimate

• Request a preliminary payoff from MOHCD

• Confirms how much you’ll owe at closing

• Helps you plan your finances and pricing

Step 3: Choose an Experienced, City-Certified DALP Agent

• Not all agents understand DALP resale requirements

• A City-Certified Realtor ensures:

  • Correct contract structure

  • Smooth MOHCD approval

  • Proper buyer screening

• This saves time, money, and stress

Step 4: Prepare and List Your Property

• Stage your home to highlight its best features

• Make minor repairs or updates if needed

• Ensure MLS listing mentions DALP resale restrictions accurately

Step 5: Review and Accept Offers

• MOHCD must approve qualified buyers

• Offers are evaluated for both price and program eligibility

Step 6: Open Escrow and Order Appraisal

• Escrow officially begins

• MOHCD may require a professional appraisal for resale

Step 7: MOHCD Issues Final Payoff Demand

• Confirms exact amount due at closing

• Ensures the shared appreciation calculation is correct

Step 8: Close Escrow and Receive Proceeds

• First mortgage and DALP loan are paid off

• Remaining proceeds go to you

• Closing costs are deducted

Step 9: MOHCD Releases the Lien

• MOHCD officially releases the DALP lien

• Confirms transaction is complete

• Buyer receives clear title

Why Working With a City-Certified DALP Agent Matters 

Selling a DALP-restricted home is not like a traditional sale. There are lottery rules, appraisal requirements, shared appreciation calculations, and MOHCD approvals.

A City-Certified Realtor like me can:

• Ensure correct listing and contract structure

• Coordinate with MOHCD and approved lenders

• Navigate timelines and document requirements

• Avoid common pitfalls that delay closings

Over the past decade, I’ve successfully guided 30+ families through buying and selling MOHCD-assisted homes. With the right certified agent, the process can be smooth, predictable, and profitable. https://www.sf.gov/find-real-estate-agent-mohcd-homeownership-programs