Pleasanton Opens Applications for Home Loan Lottery | News
The City of Pleasanton has kicked off the application period for the upcoming lottery to secure funding of up to $100,000 through a down payment assistance loan for eligible first-time home buyers in the community.
Entries 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 offer preferences to households who live or work in the city.
“The loan has a maximum term of 30 years, during which time no loan payments are required,” city officials said. “The loan is repaid with a shared appreciation either at the end of the term or when the property is sold/transferred, or refinanced; whichever comes first.”
“The amount of the loan granted through the PDALP will be based on the eligible financial need of the homebuyer; but cannot exceed $100,000 or 20% of the purchase price of the property, whichever is less. high,” they added. “Additional subsidies may also be available to eligible buyers through other private and public subsidy programs.”
The city allocated $300,000 for the program, so three potential applicants could be selected at the maximum loan amount of $100,000 each. If a selected applicant does not request the full amount, it is possible that more applicants could be helped, according to city staff.
Eligibility requirements include that all household members must be first-time home buyers – not having had full or partial ownership of real estate.
Gross household income, based on household size, cannot exceed 120% of the median income for the Alameda County area.
“A program participant must have the financial means to obtain approval from the first lender to purchase a home,” city officials said, citing criteria such as a FICO credit score of at least 660, at least 3% in cash for the deposit and up to 2% of the purchase price in reserves.
Lottery winners must also complete a federally approved homebuyer education course.
City officials also noted that the terms of the loan include a split appreciation clause, “based on the percentage of the principal loan amount provided through PDALP at the time of purchase, compared to the price of purchase of the property”.
They used the example of a $70,000 PDALP loan on a $700,000 property purchase with a borrower required to add 10% of the profit he ultimately makes on his property to the original principal of the PDALP loan. So if he made $100,000 in profit on the sale of his property, the borrower would have to repay 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; however, lottery preferences 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.