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5. Borrower's total debt to income ratio may not exceed 40% of the borrower's total income. At the discretion of the City's Housing Division, this minimum standard may be adjusted if extenuating circumstances exist (e.g., buyer has minimal debt, high FICO score, down payment exceeding the 3% minimum, etc.). 6. Borrower may use a cosigner when qualifying for the first mortgage. The cosigner's total household income shall not be included as part of the household's total income when determining the borrower's income eligibility except in cases where the DPA program is used in conjunction with specific below-market priced homes that are sold through the Pleasanton Homeownership Assistance Program (PHAP). 7. Total down payment assistance shall not exceed 20% of the purchase price of the home. Eligible closing costs, including points, shall not exceed 2% of the purchase price. Borrower must contribute a minimum 3% down payment (the minimum down payment may be reduced to 1 % if the buyer uses other Ca1HFA down payment assistance and/or secondary financing products). 8. In the event of a competing interest for funding, a priority will be given to persons who live and or work in the City of Pleasanton. The homebuyer will be required to enter into a Promissory Note and Deed of Trust with the City. 9. The homes are required to pass typical home inspections including termite and roof clearances. 10. Buyer must obtain a written property inspection report from a qualified home inspection company prior to the close of escrow. This report must cover all major systems in the house including but not limited to electrical, plumbing, foundations, drainage systems, paint, and all built-in appliances. Buyer must show evidence that City permits have been issued for all work where permits are required. 11. Buyer must purchase aone-year home warranty covering all major systems in the home including built-in appliances, air conditioners, and water heating systems. 12. Assistance provided through the DPA program shall generally be in the form of two separate loans of equal amount, one of which runs for the first ten years (using Ca1HFA HELP funds) and another which runs for the second ten years (using City funds). Payments on both loans are generally amortized over the entire ten-year period. However, the City may consider, on a case-by-case basis, deferring payments on the first loan for up to the first three (3) years if deemed necessary to improve the borrower's initial qualifying ratio. In this case, payments shall be amortized over the remaining period (e.g., seven years) so that the loan is completely repaid within the ten year term. 13. Borrower shall enter into a loan agreement with the City of Pleasanton covering the total amount of funds loaned by the City via a Promissory Note secured by a Deed of Trust for each loan. Failure by borrower to make timely loan payments to the City may result in the default of the City's loan(s) and forfeiture of ownership by the borrower. Loan funds may be used only to purchase a house and to pay for any nonrecurring closing costs associated with purchasing the