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THE CITY OF 23 pLEASANTONCITY COUNCIL AGENDA REPORT January 21 , 2020 City Manager Housing Division TITLE: APPROVAL OF MODIFICATIONS TO THE CITY'S DOWN PAYMENT ASSISTANCE PROGRAM TO INCREASE THE MAXIMUM LOAN AMOUNT, RESTRUCTURE THE LOAN TERMS, AND ADOPT A SHARED APPRECIATION LOAN POLICY FOR REPAYMENT SUMMARY The 2019 City Council Work Plan identified the need to re-examine the City's Down Payment Assistance (DPA) program to increase its effectiveness. This report describes a proposal for modifications to the DPA program to better assist prospective Pleasanton first time homebuyers. The report includes a recommendation to increase the maximum loan amount, restructure the loan terms, and adopt a "shared appreciation loan" policy for repayment. The Housing Commission discussed, reviewed, and supported these recommended modifications to the DPA program. RECOMMENDATION It is recommended the City Council approve the proposed modifications to the City's Down Payment Assistance Program. Staff also recommends that Council direct staff to include $100,000 to $300,000 in the FY 2020/21 midterm budget to be used to fund this program. FINANCIAL STATEMENT The proposed modifications to the City's DPA program would require the City to allocate more funding to support the program. The DPA program is largely funded with the Lower Income Housing Fund (LIHF), and the proposed modifications would result in more LIHF funds being expended annually. The current balance of the LIHF is $10,209,378. The annual cost of the program would be up to $300,000 per year if the City were to process three loans at the maximum funding level.