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Per the City's Municipal Code, the City's Lower Income Housing Fund (LIHF), which is currently the funding source for the City's DPA program, has a current 120% AMI maximum income limit restriction for affordable housing-related programs. Due to the high price point in Pleasanton, households capped at 80% AMI will have very few inventory of homes that they can afford as their purchasing power is much less than competing homebuyers with much higher income incomes at 120% AMI (see Table 2). As reflected on the homes sold inventory in Table 3, many of the homes affordable to 80% AMI homebuyers are 1-bedroom condo/townhome units, which is not a practical unit size for a 4-person household. Most 80% AMI households also tend to have difficulties meeting the industry standard of a debt to income (DTI) ratio of 40%. Qualifying for a mortgage becomes a challenge as their monthly debt (e.g. car payments, student loans, and credit card bills) when calculated into their gross monthly income ($7,945/month for a 4-person household with an annual income of $95,350) typically yields higher DTI ratios that do not allow them to qualify for a first mortgage. In comparison, 120% AMI homebuyers (4-person household) with $143,050 annual income have $11,920/month income that allows them to have a much lower DTI which is more appealing to lenders. Submitted by: Fis I Review: Approved b f ,(// Brian Dolan Tina Olson Nelson Fialho Assistant City Manager Director of Finance City Manager Attachments: 1) Excerpt of Minutes of May 16th and August 22nd Housing Commission meetings Page 9 of 9