The tech industry's new perk: zero-down mortgages on up to $2 million homes

Top tech workers in San Francisco can add another perk to the free meals and massages: zero-down mortgages.

Housing prices in the San Francisco Bay Area have gone insane in the past few years, to put it mildly. San Francisco’s median home value sits at $1.13 million, a 67% increase since 2011, according to Bloomberg. In 2015, San Francisco’s median home price was six times the national average.

This upsurge is the result of a variety of factors, but it has been driven forward, hard, by the rise of the tech industry.

Yet there’s a strange paradox for tech workers who are trying to buy homes. On one hand, their enormous salaries are pushing up home values. But on the other hand, a lot of their assets are in things like company equity, and aren’t liquid.

This means it can get tricky when tech workers are trying to come up with a down payment. Bloomberg notes that some of these down payments can cost as much as the average US house ($187,000).

But companies like San Francisco Federal Credit Union are being proactive about this problem. In December, the company started offering zero-down mortgages on homes costing up to $2 million, according to Bloomberg. SFFCU defends its practices by pointing out that it rejects four in 10 applicants, and that approved people have an average household income of $219,000, and a 747 FICO score.

“We are vetting our borrowers to make sure they can afford it and have reserves,” SFFCU chief lending officer, Rebecca Reynolds Lytle, told Bloomberg. But still: “It’s a loan — it’s not going to be risk free.”

Others are not so charitable about this type of lending practice.

“Given what we went through in 2008, zero-down financing is suicidal for our country,” Chuck Green, CEO of mortgage broker Bay Area Capital Funding Inc., told Bloomberg.

But zero-down mortgages aren’t the only way banks are trying to attract tech workers.

First Republic Bank has even opened branches inside Facebook and Twitter’s headquarters to try and snag them.

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