Supervisors approve $5 million supplemental appropriation for down-payment-assistance program on first reading

The board heard public comment and proposals before voting to appropriate $5 million from the general fund to the Down Payment Assistance Loan Program (DALP). Supervisor Sandoval introduced the item and asked the budget analyst and Mayor's Office of Housing to explain program details and anticipated effects.

Budget analyst Christine Martin told the board that in 2005–06 the program averaged about 45 loans annually at an average loan amount of approximately $55,000 (about $4.9 million over two years). She said program changes shifted some loans from below-market units to market-rate purchases and that for 2007 average loan amounts had risen to about $118,000. Martin concluded that the requested $5 million, added to about $2.1 million currently in the fund, would likely be loaned out over the next one to two years but that the appropriation is a policy matter for the board.

Myrna Melgar, director of homeownership programs at the Mayor's Office of Housing, described eligibility and the program's shared-appreciation structure: loans are repaid 40 years after purchase or on sale, and borrowers repay the principal plus a proportionate share of appreciation. Melgar gave the program example: "Suppose Jane Doe purchases a condo for $400,000 ... she borrows $20,000 from the DALP ... 5 years later she sells it and it's worth $500,000 ... Jane has to pay back the initial $20,000 ... plus 5% of her profit of the $100,000." She said the maximum DALP loan is $150,000 and the maximum purchase price in the program was recently raised to $620,000.

Public commenters from the Mission Economic Development Agency, San Francisco Housing Development Corporation and others urged both increased funding and a dedicated foreclosure-prevention or "rescue" loan fund. Jane Duong of the Mission Economic Development Agency said "The DALP program is a crucial part of helping any low to moderate income family to even consider purchasing a home in San Francisco." Multiple speakers asked the board to set aside $2 million for foreclosure prevention; counselors and housing advocates said the city is seeing rising foreclosure need.

Supervisors questioned program reach and equity. Several asked why program participation skewed by district and ethnicity and sought targeted outreach to Latino and African American households; Melgar said outreach and program reforms were underway and that program managers would return with status reports. Supervisor Maxwell asked about defaults and Melgar replied there had been "no defaults, or foreclosures in the program" to date.

A roll-call vote on the ordinance to appropriate $5,000,000 passed on first reading with nine ayes and two nos; the transcript records the tally but the excerpted roll call did not clearly link each named vote to a yes or no in the provided text. The budget analyst and Mayor's Office of Housing staff said they would provide follow-up reporting on program use and outreach.