The city of Pleasanton has launched the application period for the upcoming lottery to secure funding of up to $100,000 via a down payment assistance loan for qualifying first-time homebuyers in the community.
Signups to participate in the lottery are due by 5 p.m. March 23 to the city's contracted nonprofit administrator, the Bay Area Affordable Homeownership Alliance. The "Pleasanton Down-Payment Assistance Loan Program" (PDALP) lottery will provide preferences to households that live or work in the city.
"The loan has up to a 30-year term, during which time no payments on the loan are required," city officials said. "The loan is repaid with shared appreciation either at the end of the term or at the time the property is sold/transferred, or refinanced; whichever comes first."
"The amount of loan provided through the PDALP will be based on the homebuyer's financial qualifying needs; but cannot exceed $100,000 or 20% of the property purchase price, whichever is less," they added. "Supplemental subsidies may also be available to eligible buyers through other private and public subsidy programs."
The city has allocated $300,000 to the program, so three prospective applicants could be selected at the maximum loan amount of $100,000 each. If a selected applicant doesn't request the full amount, there is the chance that more applicants could be assisted, according to city staff.
Eligibility requirements include that all household members must be first-time homebuyers -- having not had full or partial ownership in a piece of real estate property.
Gross household income, based on household size, cannot exceed 120% of Alameda County's area median income.
"A program participant must have the financial wherewithal to secure first lender approval to purchase a home," city officials said, citing criteria such as a FICO credit score of at least 660, at least 3% in cash toward the down payment and up to 2% of the purchase price in reserves.
Lottery winners must complete a federally approved homebuyer education course as well.
City officials also noted that terms of the loan include a shared appreciation clause, "based on the percentage of the principal loan amount provided through the PDALP at the time of purchase, in relation to the purchase price of the property."
They used an example of a $70,000 PDALP loan on a $700,000 property purchase with a borrower required to add 10% of the profit they make in the end on their property to the original PDALP loan principal. So if they made $100,000 in profit upon selling their property, the borrower would need to pay back the original $70,000 loan to the city plus $10,000 (10% of the profit).
Any household that meets the eligibility criteria can apply for the PDALP lottery, regardless of where they live; although, preferences in the lottery will be given to households that live or work in Pleasanton. The property must be within the city limits.
To learn more, visit the alliance's website at www.myhomegateway.org.