Capital Improvements and Special Assessments

MOHCD encourages homeowners to maintain the quality of their home under Below Market Rate (BMR), City Second loan programs (CSLP) and San Francisco Redevelopment Agency (SFRA) programs.

What to do

Capital improvements information

Homeowners may only begin claiming capital improvements made ten (10) years after the unit was originally occupied. The general guidelines of capital improvements are based on the definition of capital improvements provided by the IRS: add value to the property, prolong its useful life, or adapt it to new uses or any structural changes to a building. For specific guidelines and requirements of the eligible capital improvement costs, please refer to the Capital Improvements Policy in the City loan documents that govern the individual unit, as these policies may be amended from time to time for the purposes of resale affordability.

Keep in mind that, in condominium projects or planned developments, the homeowners associations'(HOA) governing documents (Bylaws and/or Covenants, Conditions, and Restrictions) will typically require the HOA to give its approval on certain home improvement projects, such as plumbing, electrical, aesthetic changes to the exterior, and etc. Homeowners shall read the HOA governing documents to learn about restrictions in their building and contact the HOA for approval before making such improvements.

Furthermore, Homeowner’s Association (HOA)-initiated special assessments are considered capital improvements and will be added to the resale price of the home. Regular HOA dues are not eligible under this policy.

Capital improvements required documents

For capital improvements consideration, please submit the following:

  • A list of capital improvements with description using the Capital Improvements Excel Spreadsheet provided by MOHCD.
  • The receipt and invoice for each eligible improvement.
  • Proof of Payment for each listed capital improvement, such as a cancelled check, bank account statement or credit card bill statement.
  • A copy of site or building permits, if required by SF Department of Building Inspection.
  • Contractor’s license number for Projects exceeding $500.
  • Photos of "before remodel" and "after remodel" (recommended).

HOA special assessments required documentation

For special assessment consideration, please submit the following:

  • A list of special assessments with description using the Capital Improvements Excel Spreadsheet provided by MOHCD.
  • An Invoice from the homeowner’s association verifying the amount and date the assessment was billed to the homeowner.
  • Proof of Payment for each listed special assessment, such as a cancelled check, bank account statement or credit card bill statement.
  • A HOA "billing notice" or similar document for the special assessment. The document must state the purpose of the special assessment, contain the amount each unit owner is obligated to pay and the due date of the special assessment.   

For any submission, MOHCD reserves the right to request additional documentation as deemed appropriate.

Due to an increase in volume, MOHCD is prioritizing Capital Improvement requests that are related to a sales transaction. For all other requests, MOHCD may take longer to process your request. We appreciate your patience.

Capital improvements policy

Once the housing unit becomes eligible for capital improvements credit, homeowners may begin submitting documentation of completed work in accordance with the timeframe requirement outlined in their capital improvement policy that regulates their unit. 

To preserve affordability, MOHCD has the right to refuse any improvement or update that would take the home out of the affordable range. This does not mean that homeowners cannot improve or upgrade their property, only that the improvement or update may not be included in the resale price. 

Capital Improvements Policies under homeownership programs are listed below:

For a quick overview of the capital improvements policy by program, please view the  Capital Improvements Policy Chart (PDF).

Send capital improvements documentation for approval

Contact Information:
Loan Servicing
Mayor’s Office of Housing and Community Development
1 South Van Ness Avenue, 5th Floor
San Francisco, CA 94103
(415) 701-5500

Last updated November 16, 2022