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that are the most affordable to entry-level moderate income buyers. These same homes, due to their age, are likely to have structural problems unless they are well maintained or rehabilitated. The 11,600 housing units that were built prior to 1980 will require increased attention in order to be properly maintained. While the Housing Rehabilitation program has already served some of these units over the past two decades, the addition of a moderate income component will enable more to be rehabilitated, thereby preserving affordable housing for the owners of those homes. Staff anticipates that the requested funding will preserve 10 to 15 units in the first year. The framework for the Housing Rehabilitation program is already in place through a contract between the City and Neighborhood Solutions, a housing rehabilitation services provider. Therefore, the City is in a position to make immediate use of the HELP funds if awarded. Down Payment Assistance Program As the Council is aware, the City established a Down Payment Assistance (DPA) program in late 2003. The program was funded through an allocation of $450,000 from CaIHFA's HELP program. The City combined the HELP funds with $150,000 in local funds (from the Lower Income Housing Fund) to create a pool of $600,000. Based on the criteria established for the program (see attached brochure), the City anticipated providing DPA loans to 10 to 15 low and moderate income home buyers. Eligible low income buyers can receive up to $60,000 in down payment assistance, while qualified moderate income buyers can receive up to $40,000. The HELP funds were provided to the City in the form of a ten-year loan at 3% interest (the interest rate has since changed to 3.5%). The initial loan agreement with CaIHFA (executed in November 2003) committed $450,000 for two years (i.e., it was CaIHFA's expectation that the City would issue loans and utilize the funds by November 2005). HELP funds are drawn down from CaIHFA as each loan is funded. The original intent of the DPA program was to provide a new financial tool to help low and moderate income buyers purchase existing homes in Pleasanton. The program was seen as an important addition to the City's other main home ownership effort which involved the sale of specific new homes at below-market prices (e.g., the 56 homes on the Bernal property). At the time the DPA program was approved and introduced, market housing prices in Pleasanton were experiencing a period of significant increase. Since 2003, the average home price in Pleasanton increased by more than 30%. The median sales price for a single family home in Pleasanton is presently $860,000 while the median price for a condominium is $505,000 (source: Bay East Association of Realtors). The combination of high market housing prices and the income eligibility requirements established by the City essentially created an impediment to the effectiveness of the DPA program. In spite of significant outreach efforts, the City was only able to issue three loans during the initial two-year CaIHFA commitment period. In October 2005, staff submitted a request to CaIHFA fora one-year extension to the November 2005 expenditure Page 3 of 5