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Option 2 -Add City funds to the program and maintain the existing criteria and terms (e.g., $60,000 maximum loan amount, etc.) Option 3 -Add City funds to the program but modify the existing criteria and terms for loans that are funded 100% from City funds Regarding Option 1, staff does not recommend termination of the DPA program as it continues to be an important local tool to promote home ownership, particularly given the current favorable housing market. However, the Council could temporarily suspend the program pending identification of a new source of funding to match City funds. Regarding Option 2, as indicated above, the program has been funded by a combination of CaIHFA and City funds, and as a result, loans could be set at a maximum of $60,000 without being inconsistent with a general practice of limiting City home ownership loans to $20,000. While staff will continue to look at other grant and funding opportunities, it is doubtful that it will receive CaIHFA funding in the future due to an established a policy within its HELP program that prevents cities from receiving more than one allocation for the same project. Although CaIHFA provided the City of Pleasanton with a second round of funds in August 2007, this was apparently aone-time exception that was regarded more as a "final extension" to give the program one more chance to succeed (the agency provided renewed funds to several other cities in similar situations). Therefore, staff does not anticipate the opportunity to receive HELP funds in the future and is concerned that any loan amount over $20,000 based solely on City funds may be excessive for a single household and may pose a drain on the City's Lower Income Housing Fund. However, the Council could address this later concern by limiting the total funding pool available to the program. As a result of an interest in maintaining the program and due to concern with the maximum loan amount, at its meeting of May 15, 2008, the Housing Commission settled on a maximum loan amount of $20,000 with a total funding pool of $300,000 if the loans are funded exclusively by the LIHF. The Commission indicated that this amount would be consistent with a general practice of limiting mortgage loans to $20,000 and that it could fund approximately 15 loans which may be reflective of current demand. Consistent with Commission action, staff recommends Option 3 above. Staff has amended the current loan guidelines (Attachment 1) to reflect the reduction of the maximum loan amount for 100% City-funded loans to $20,000. No other significant changes to the guidelines are proposed. The modified guidelines would keep the existing DPA program intact in case additional matching funds are received in the future. In the event supplemental funding from an outside source becomes available in the future, or if staff determines that the new Page 4 of 5