Buying a Fixer-Upper in SF: Permits, Lead Paint, Renovation Loans

A "contractor special" in San Francisco is sold by the same bidding war as everything else, so the list-price discount is usually smaller than the work it hides. Before you write, you need four numbers the listing omits: the finished value, what the work costs here, how long the city takes, and what you can borrow on an unfinished house.

How fixers are priced here

Start from the finished value, not the asking price. Open the comps tool for the address and toggle off the unrenovated sales; the prediction from renovated houses of the same size and type is your after-renovation value. Subtract your bids, soft costs, carrying costs, a contingency and a margin for risk; what is left is the most the fixer is worth to you.

As of 2026-10-24 there is no reliable published San Francisco cost per square foot worth quoting; three bids on real drawings are the benchmark, and any scope touching a kitchen, a bath and the old systems is a six-figure project here. Contractor specials often sell above your number anyway: flippers bid with cheaper labor and no rent to pay, and list prices are set low to start the auction.

Financing the work

Renovation mortgages fund the purchase and the work in one loan, paid out in draws against a "subject to completion" appraisal. The catch is the ceiling: Fannie Mae's HomeStyle and Freddie Mac's CHOICERenovation are conforming products, so the whole loan including renovation funds must fit under the 2026 San Francisco County limit of $1,249,125, and both cap the renovation budget at 75% of the lesser of the purchase price plus renovation costs or the as-completed value (as of 2026-10-25, check the current selling guides). FHA 203(k) follows the FHA county limit, the same figure for a one-unit SF home.

Above the limit the paths are a jumbo plus cash, a jumbo plus a HELOC opened after closing (variable rate, lent on today's value), or a construction loan from one of the few portfolio lenders that underwrite to the finished value. Most SF buyers use the first two; conforming vs jumbo covers the line itself.

DBI permits: over the counter vs plan review

DBI issues permits in two lanes. Over the counter covers work that keeps the footprint, structure and use (a kitchen in place, re-roofing, rewiring, re-piping); a plan checker reviews while you wait and the permit can issue the same visit. Anything that moves walls, adds floor area, changes the unit count or touches structure goes to full plan review and is measured in months. As of 2026-10-24, check DBI's published review times before you set a move-in date, and pull the 3R report first so you know what was legally built (the disclosure package explains it).

Planning: 311 notices, Discretionary Review and historic review

Section 311 notification. Rear additions, vertical additions and new decks in residential districts have generally required Planning to mail notice to owners and occupants within 150 feet before the permit issues. The notice period is 30 days, during which anyone can request Discretionary Review, which sends the project to a Planning Commission hearing, usually with design changes and months of delay. Which scopes need notice now depends partly on whether the property sits inside the Priority Equity Geographies Special Use District (as of 2026-10-25, per Planning's notification packet), and permitting reforms keep changing the list, so confirm the current rule for your scope with Planning, and meet the neighbors before the letter does.

Historic resource review. Under CEQA, Planning evaluates whether a building is a historic resource before approving work on it, and the age screening threshold it has used is 45 years. A property in a survey or historic district should expect a consultant's Historic Resource Evaluation and limits on facade changes; confirm your property's status with Planning's preservation staff before you pay for drawings.

Pre-1978 realities: lead and asbestos

Most SF houses predate 1978, so assume lead paint and asbestos until testing says otherwise.

• Federal law requires the seller of pre-1978 housing to disclose known lead paint; "no knowledge" on the form is not a test result.
• The EPA's Renovation, Repair and Painting rule requires contractors disturbing painted surfaces in pre-1978 homes to be EPA-certified and use lead-safe practices; ask every bidder for the certification number.
• San Francisco adds its own work-practice and notice rules for exterior work on pre-1979 buildings (Building Code Section 3407); check DBI's current rules before anyone sands a facade.
• Asbestos is common in old floor tile and mastic, pipe insulation, textured ceilings and some plasters; abatement needs a licensed contractor, and larger jobs must be reported to the air district (BAAQMD) first.

Certified testing before you finalize bids is a few hundred dollars per visit (as of 2026-10-24, check current figures); abatement found mid-project is where fixer budgets fail.

Systems you will meet

Knob-and-tube wiring is common in houses built before about 1940 that were never fully rewired, and some Bay Area insurers have been declining or non-renewing homes that have it. A full rewire is five figures (national cost guides run roughly $8,000 to $25,000, with some ranging to about $36,000; SF bids often come in higher), the 60- or 100-amp panel usually needs upgrading, and a larger service needs a PG&E application with its own lead time. Galvanized supply lines, clay sewer laterals and brick or unbolted foundations are the other usual finds; SF red flags covers each.

A remodel that opens the ground floor or adds a story brings seismic work with it. Bolting and cripple-wall bracing on a sound concrete foundation is the cheap end (national cost guides put it at about $3,300 to $7,600; the Earthquake Brace + Bolt program pays up to $3,000 on eligible houses); a brick foundation under an addition is a replacement and a six-figure line. Seismic retrofit financing covers grants and loans.

Unwarranted work: legalize, remove or leave alone

The 3R report lists the permits on file and the legal unit count; a finished basement, third bath or garage apartment missing from it is unwarranted, and you inherit it.

• Legalize. The city's program under Planning Code Section 207.3 lets you permit an unauthorized unit, but legalized units can never be condo-converted and certain no-fault evictions disqualify the building.
• Remove. Removing a dwelling unit, even an unauthorized one, has generally required Conditional Use authorization since Ordinance 33-16, with a narrower path for single-family homes under Ordinance 064-24, and a tenant in it keeps full just-cause protection.
• Leave it. Insurers may dispute a claim on unpermitted work, appraisers give it little credit, and your own permit application invites the inspector to look.

A land-use attorney's read of the 3R and enforcement history is cheap by comparison (when you need an attorney); TIC conversion and ADUs covers what you can build later.

Insurance during the work, property tax after

Your lender requires hazard insurance from closing day, and standard policies restrict coverage once a home sits vacant beyond a set number of days or during major construction. Tell your broker the plan before close and ask about a vacancy endorsement or a builder's risk policy; houses that carriers decline for wiring or foundation land on the California FAIR Plan at higher cost (homeowners insurance covers the hard market).

After the work, the Assessor adds only the new construction to your Prop 13 base: repainting, a new roof and an in-kind kitchen are maintenance and are not reassessed; an added room, floor or converted garage is, at the value it adds. Seismic work is excluded (Revenue and Taxation Code section 74.5) when you file the Assessor's exclusion claim, so keep it on its own permit; a gut remodel that leaves a building substantially equivalent to new can be reassessed in full (Prop 13 and Prop 19 has the table).

Fixer vs finished: a worked comparison

Illustrative; your bids and the comps tool replace these numbers.

If the fixer lists at $1,250,000 and sells at $1,450,000, the finished house was the better buy. The fixer wins when you can live in it during the work, when the scope stays over the counter, or when you want a layout the finished comps lack.