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BACKGROUND Pleasanton has maintained a Down Payment Assistance (DPA) Program to assist first time homebuyers with obtaining home ownership since 2003. There is currently a total of fifty (50) homeowners who have a down payment assistance loan from the City. Of these loan borrowers, forty-six (46) reside in and own Below Market Rate (BMR) homeownership units, while the remaining four (4) own un-restricted, market-rate units. The purpose of the DPA Program is to provide low and deferred interest mortgages that supplement bank financing to assist low- (80% AMI) and moderate-income (120% AMI) households purchase homes in Pleasanton. The program, which is directed to first time homebuyers, is seen as an important addition to the City's other main home ownership effort which includes providing BMR homeownership units. However, as the market housing prices in Pleasanton, and in the Bay Area overall, continue to rise, the City's DPA Program has been rarely used in recent years. Only one (1) DPA loan has been issued since 2015. DISCUSSION Pleasanton's Down Payment Assistance (DPA) Program currently provides up to $20,000 in down payment assistance for low- and moderate-income buyers. Assistance is in the form of a low-interest (3.5%) loan that is amortized over 20 years. The program's interest rate was relatively competitive as compared to the 4.25% prime rate in 2003. The City currently contracts with the non-profit Hello Housing to administer the DPA Program. However, with the high price points of the for sale homes in Pleasanton (the median sale price for a single-family detached home in Pleasanton in November 2019 is $1.13 million, per Bay East Association of Realtors), prospective Pleasantonian first time home buyers are not able to utilize the DPA Program. The maximum $20,000 loan is insufficient to be used to contribute to the industry requirement of at least 20% down payment, which would be more than $220,000 for a single-family detached home in Pleasanton. Even condominium or townhome units that have lower price points ($685,000 median sale price in November 2019) would still require more than $137,000 in down payment to purchase such an attached unit. Proposed Modifications to the DPA Program Based on the lack of loans being issued, City and Hello Housing staff had discussions with the Housing Commission to re-evaluate and revamp the DPA Program. The possible modifications to the DPA program described below were evaluated. These modified program policies were primarily borrowed from the Alameda County Down Payment Assistance Program (AC Boost), which is funded with the voter-approved Measure Al Affordable Housing Bond. 1. Increase the maximum loan amount from $20,000 to $100,000. An increase in the maximum loan amount increases a homebuyer's purchasing Page 2 of 6