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Options for the Future of the DPA Program Based on the loss of program funding and the minimal number of loans issued, it seems appropriate to reevaluate the DPA program. To that end staff has identified the following general options for consideration: A. Terminate the Program. Under this option the City would cease offering the DPA program. While the program has generated interest, loan issuance remains difficult and this situation will likely continue in the future. Staff would work to explore other opportunities to facilitate home ownership. B. Replace HELP Funds with City Funds. Under this option, the City would fund the DPA program entirely with local funds (i.e., from the Lower Income Housing Fund). This recommendation would require an allocation of $355,000 from the LIHF that could be combined with the $105,000 of existing funding for a total program amount of $460,000. Funding the program entirely places the City at greater risk in the event of a loan default and while there has not been a default on any existing affordable housing loans to date, a loan default is clearly a possibility. As an alternative the City could fund the program in an amount less then $460,000 with additional funding provided as necessary to meet demand. C. Provide Interim City Funding Necessary to Maintain the Program Pending Resolution of the HELP Grant Application. As approved by the Housing Commission, this option involves the allocation of an additional $95,000 to create a total funding pool of $200,000. Depending on CaIHFA's response to the City grant application, the HC and staff will review the program and make appropriate modifications to allow for the issuance of more loans. However, as indicated at the Housing Commission meeting, due to the high cost of housing, program modifications may be limited to include, increasing the maximum loan amount (currently set at $40,000 for moderate income and $60,000 for low income households), extending the payment period of the City loan beyond the current 20 years (loans would still be payable in full at the time of sale), removing the first time homebuyer restriction (Currently, first time homebuyer restrictions apply to all households except those that have resided in City housing subject to a regulatory agreement.) or eliminating restriction of cosigners to allow a parent to cosign without being included as part of household income as is currently the case. Another alternative involves transferring the administration of the program to the Home Opportunity Center as a means on consolidating affordable housing services in the Tri-Valley. Finally, depending on the response from CaIHFA, the HC can also weigh in on the potential for the City funding the program entirely. Ultimately, regardless of the high interest in maintaining the program, any program modification must be made with an understanding that the financial realities of home ownership in Pleasanton make it extremely challenging for moderate and lower income households to purchase housing without financial assistance significantly beyond the $60,000 program limit. As a result, any moderate level, and most likely appropriate level, of City financial assistance, may result in only a few loans. Page 5 of 6