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Tax Credit Proceeds <br />In November 2016, the Project was awarded gross Tax Credits with a value of $17.90 million <br />paid out over a 10 -year period. These Tax Credits are sold on a secondary market, and the net <br />syndication value is ultimately determined based on competitive market conditions and on the <br />timing of disbursements. Bank of America (Tax Credit Investor) agreed to purchase the gross <br />Tax Credits for a price of $1.01 per gross Tax Credit dollar. Initially, $18.04 million in total Tax <br />Credit proceeds were available to the Project. However, due to construction delays the Tax <br />Credit Investor has imposed a $508,800 Tax Credit Adjustor to the Tax Credit Proceeds. As <br />such, the net Tax Credit equity available to the Project is $17.53 million. <br />AHSC Program Funds <br />The Developer received a total of $4.97 million in funding from the AHSC Program. The specific <br />sources for these funds are as follows: <br />1. A $4.94 million AHSC Affordable Housing Development Loan; and <br />2. A $22,500 AHSC Program Activities (PRG) Grant. <br />Deferred Developer Fee <br />The Developer is proposing to defer 100% of the $2.0 million developer fee. The deferred <br />developer fee will be paid from cash flow, and is required by the Internal Revenue Service to be <br />repaid within 15 years. Based on the cash flow analysis, it is anticipated that there will be <br />insufficient cash flow to meet the 15 -year repayment deadline. At that time, the Administrative <br />General Partner (AGP) will make a loan to the Limited Partner for the outstanding balance of <br />the deferred developer fee. This AGP Loan will remain in priority position and will be required <br />to be repaid in full before residual receipts are distributed. <br />City Inclusionary Housing Funds <br />The City entered into a Loan Agreement with the Developer on July 5, 2017 to provide <br />$4,775,000 in City Inclusionary Housing funds to the Project. <br />City CDBG Funds <br />The City entered into a Loan Agreement with the Developer on July 5, 2017 to provide $500,000 <br />in City CDBG funds to the Project. <br />Total Available Funding Sources <br />As shown in Table 3, the available funding sources total $33.22 million. <br />Financial Gap Calculation <br />Based on the assumptions outlined in this analysis, the financial gap is calculated as follows: <br />City of Santa Ana HOME Subsidy Layering Review: Santa Ana Arts Collective Page 110 <br />25J-32 <br />