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lower price points would presumably still require more than $150,000 in down payment to purchase an $800,000 unit. Proposed Changes to the DPA Program Based on the lack of loans being issued, City and Hello Housing staff had a discussion with the Housing Commission to re-evaluate the DPA Program. At the May 16, 2019 Housing Commission meeting, staff and the Housing Commissioners evaluated possible changes to the program in order to improve the program so that it can better assist prospective Pleasantonian first time homebuyers. To that end staff is recommending that the Pleasanton DPA program assimilate to the following program policies of the Alameda County Down Payment Assistance Program (AC Boost), which is funded by the Measure Al Affordable Housing Bond. 1. Increase the maximum loan amount from $20,000 to $100,000. There are two different AC Boost loan limits based on the applicant's household income. Buyers earning less than 100% AMI (Area Median Income) have a loan limit of $150,000. Buyers earning between 100% and 120% AMI have a loan limit of $100,000. An increase in the maximum loan amount increases a homebuyer's purchasing power, and consequently, staff is recommending a new maximum loan amount of $100,000 for eligible households earning no more than 120% AMI, the maximum income limit restriction for affordable housing -related programs funded with the City's Lower Income Housing Fund (LIHF), which is currently the funding source for the DPA Program. As previously described, the current DPA program is underutilized in today's real estate market as homebuyers need more than the $20,000 maximum loan amount that the program currently offers for their down payment. Staff is projecting that there would be a noticeable increase in the number of households applying for and actually benefitting from the higher maximum DPA loan amount. 2. Restructure the DPA loan to a "Deferred Payment Loan". The DPA loan terms would be restructured from a 20-year/3.5% interest rate loan with required monthly repayments to a 30-year/0% interest loan with no required monthly payment so long as the buyer occupies the home. The restructured DPA loan defers repayment until the earliest of the end of the 30 -year term, or when the home is no longer occupied, or when the home is sold. Though the DPA loan is restructured to have 0% interest, there is a mechanism for not only recapturing the loan, but also gaining additional repayments based on the proportionate share of the increase in the home value. This is further discussed in the "Shared Appreciation Loan" in section 3 below. The City is currently receiving nominal monthly repayment amounts from its existing DPA loan accounts. Staff anticipates that, although the repayments would now be deferred, the larger repayment amounts could better replenish the DPA Program funds; which consequently, would be able to assist more households. Page - 2 -