City of Pleasanton

PLEASANTON — In its recent meeting on Oct. 20, the Pleasanton City Council unanimously approved modifications to the city’s Down Payment Assistance (DPA) Program, which has been helping first-time homebuyers obtain home ownership since 2003.

The program provides low- and deferred-interest mortgages that supplement bank financing to assist low- (80% area median income) and moderate-income (120% area median income) households in purchasing homes in Pleasanton. The program is seen as an important addition to the city's other main home ownership effort, which includes providing below market rate (BMR) homeownership units.

However, according to a report made to the council by Housing Manager Steve Hernandez, as the market housing prices in Pleasanton and the Bay Area continue to rise, the program has been rarely used in recent years. Only one DPA loan has been issued since 2015.

“(The) program currently provides up to $20,000 in down payment assistance for low- and moderate-income buyers … in the form of a low-interest (3.5%) loan that is amortized over 20 years,” said Hernandez in the report. “However, with the high price points of the for-sale homes in Pleasanton — the median sale price for a single-family detached home in July 2020 is $1.3 million, per Bay East Association of Realtors — prospective Pleasantonian first-time home buyers are not able to utilize the DPA Program.

“The maximum $20,000 loan is insufficient to be used to contribute to the industry requirement of at least 20% down payment, which would be more than $260,000 for a single-family detached home in Pleasanton. Even condominium or townhome units that have lower price points — $755,000 median sale price in July 2020 - would still require more than a $151 ,000 down payment to purchase one of these units.”

Due to the rise in home prices in the area and the subsequent lack of loans being issued, city staff have discussed ways to make the DPA Program more attractive to first-time homebuyers with the Housing Commission. According to the report, these potential modified program policies were primarily borrowed from the Alameda County Down Payment Assistance Program (AC Boost), which is funded with the voter-approved Measure Al Affordable Housing Bond. Measure Al, a $580-million general obligation bond for affordable housing, was approved by more than 73% of Alameda County voters in November 2016.

The upcoming changes to the program include increasing the maximum loan amount from $20,000 to $100,000; restructuring the DPA loan to a deferred payment loan; and adopting a shared appreciation loan.

“There are specific benefits for the DPA loan terms to mirror how the AC Boost loan is structured,” according to the report. “Having the same loan structures would avoid confusion among potential borrowers and could simplify the home buying process for these borrowers. Hello Housing has already secured 42 AC Boost participating lenders … all of which have been willing to originate a first mortgage for AC Boost applicants or are actively lending to AC Boost loan borrowers. With the same documents and matching terms as AC Boost, these lenders are anticipated to approve Pleasanton's DPA loan as a $100,000 DPA loan with 20-year, 3.5% interest rate loan terms that requires monthly payments that would generate $28,245 in interest payments (and approximately $1,360 in earnings on those payments for a total return of $129,605) for the city after 10 years.”

Before the vote, council members asked questions and voiced their support for the changes to the program. In going forward, the council determined that though the program currently shows only three loans available for 2021, an increase in its popularity could bring a request for more funding to the council in the future. Vice Mayor Kathy Narum made the motion to approve the changes.

“I think this is a great program — it’s one more way to get housing for people,” she said. “At $100,000 it seems … somewhat economical compared to what it costs to subsidize a below-market unit in an apartment complex, which is easily double or triple that. I would hope that if there is a groundswell of interest, we could at least have a conversation about allocating more than the S300,000 midterm to this program.”

Councilmember Jerry Pentin seconded the motion.

“I think this expansion, additional money ... and having this layered with AC Boost and then the shared interest loan, really will give some first-time homebuyers a chance at buying a home in Pleasanton,” he said. “I agree with Vice Mayor Narum that the opportunity to take a look at this and maybe fund even more if we find that we have more applicants … after the first go around.”

With final comments and support from Mayor Jerry Thorne, the council approved the motion unanimously with a roll-call vote.

To watch the meeting, visit To read the full report, visit