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THE CITY OF L£~S~4NTONo CITY COUNCIL AGENDA REPORT P November 6, 2007 Assistant City Manager TITLE: APPROVAL OF MODIFICATIONS TO GUIDELINES FOR THE CITY'S DOWN PAYMENT ASSISTANCE LOAN PROGRAM SUMMARY Pleasanton has maintained a Down Payment Assistance (DPA) program to assist eligible home buyers to attain home ownership since 2003. In late 2006, the City lost its program funding from the California Housing Finance Agency (CaIHFA), but funding was subsequently restored in August 2007. In April 2007, the City Council directed the Housing Commission to review the DPA program to develop improvements to maximize its success. This report provides a recommendation regarding modifications to the DPA program guidelines. HOUSING COMMISSION RECOMMENDATION The Housing Commission (HC) met on September 20 to consider the program and recommended several specific modifications to the guidelines that it believes will make the DPA program more successful and user-friendly. Proposed amendments include modifying the existing co-signer restriction, deferral of payments and interest on the first 10-year amortized loan for the first three years, utilizing a 50/50 split between City and CaIHFA funds for all DPA loans, and increasing the maximum loan amount for moderate income buyers from $40,000 to $60,000. The Commission also directed staff to solicit input from lenders and realtors prior to forwarding a recommendation to the City Council. Staff met with and received feedback from the Bay East Association of Realtors (BEAR) Housing Opportunity Council on September 25. RECOMMENDATION Approve the amendments to the guidelines for the DPA program as included in Attachment 1. These amendments have been recommended by the Housing Commission. FINANCIAL STATEMENT The recommended amendments to the DPA program would not have any direct fiscal impact on the City. The Council previously allocated $200,000 to the DPA program from the City's Lower Income Housing Fund (LIRE) as a match for the $250,000 allocated from CaIHFA.