06 - Laserfiche WebLink

(DTI) ratio, which is a critical eligibility criteria not only for the DPA Program but also for securing a first mortgage from a lender. The AC Boost, meanwhile, eliminates this monthly debt, by providing a loan with no interest and no monthly payment for a term of 30 years, so long as the buyer occupies the home. The lower a borrower's DTI, the more likely he/she is able to secure mortgage financing and better loan terms. Without the required repayments that replenish the DPA Program funds that have been used to assist other DPA loan borrowers, though, these deferred loans would result in fewer households being able to take advantage of the DPA Program. c. Adopt a "Shared Appreciation Loan". Pleasanton's DPA Program currently does not provide a "shared appreciation loan" the way the City of Livermore and AC Boost loans are structured. Under this loan structure, the term of the loan is interest-free, deferred loan with no monthly payment for 30 years (as described previously). The principal balance amount plus a share of the appreciation becomes due at the end of the 30 -year term or when the homeowner sells or transfers the property. For example, if the borrower receives the DPA loan in the amount of $100,000 with a purchase price of $900,000, the loan amount is 11 % of the purchase price. Therefore, the share of the appreciation would also be 11 %. Sample: Original Purchase Price $900,000 DPA Loan Amount $100,000 Shared Appreciation 11% Proposed Sell Price $1,100,000 Amount Appreciated $200,000 DPA Shared Appreciation $22,000 Estimated 1St Mortgage Pay Off $677,302* (4.75% interest on a 30 -year loan) DPA Loan Due $122,000 Estimated Total Pay Off $799,302 Estimated Funds to Borrower $300,698 * Calculation assumption based on 10 years of repayment. 2. Explore Other Program Models. Under this option, City staff would be directed to review other down payment assistance loan program policies from other jurisdictions to assess the compatibility of these policies to the City's DPA Program. Several of these policies include: Page - 3 -