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THE CITY OF <br />>� : � Baa iit�liii nlaa <br />PLEASANTON., <br />Housing Commission <br />Agenda Report <br />August 22, 2019 <br />Item 4 <br />SUBJECT Review and Approve Proposed Changes to the Pleasanton's Down <br />Payment Assistance (DPA) Program <br />RECOMMENDATION <br />Staff recommends the Housing Commission review the proposed changes to the Pleasanton's <br />Down Payment Assistance (DPA) Program and forward them to the City Council to discuss the <br />policy issue associated with potential funding of such a program. <br />BACKGROUND <br />Pleasanton has maintained a Down Payment Assistance (DPA) Program to assist first time <br />homebuyers with obtaining home ownership since 2003. There is currently a total of fifty (50) <br />homeowners who have a down payment assistance loan from the City. Of these loan <br />borrowers, forty-six (46) reside in and own Below Market Rate (BMR) homeownership units, <br />while the remaining four (4) own un -restricted, market -rate units. <br />The purpose of the DPA Program is to provide low and deferred interest mortgages that <br />supplement bank financing to assist low- (80% AMI) and moderate -income (120% AMI) <br />households purchase homes in Pleasanton. The program, which is directed to first time <br />homebuyers, is seen as an important addition to the City's other main home ownership effort <br />which includes providing BMR homeownership units. <br />As the market housing prices in Pleasanton, and in the Bay Area overall, continue to rise the <br />City's DPA Program has been rarely used in recent years. Only one (1) DPA loan has been <br />issued since 2015. <br />DISCUSSION <br />Pleasanton's Down Payment Assistance (DPA) Program currently provides up to $20,000 in <br />down payment assistance for low- and moderate -income buyers. Assistance is in the form of a <br />low-interest (3.5%) loan that is amortized over 20 years. The City currently contracts with the <br />non-profit Hello Housing to administer the DPA Program. <br />However, with the high price points of the for sale homes in Pleasanton (the median sales <br />price for a single-family detached home in Pleasanton in June 2019 is $1.248 million, per Bay <br />East Association of Realtors), prospective Pleasantonian first time home buyers are not able to <br />utilize the DPA Program. The maximum $20,000 loan simply is not enough to contribute to the <br />industry requirement of at least 20% down payment, which would be more than $250,000 for a <br />single-family detached home in Pleasanton. Even condominium or townhome units that have <br />Page - 1 - <br />